Beyond
the corporate governance theory
Governance Integrity Solutions (UK)
Ltd. (GIS) are leading providers of corporate governance
consultancy and management solutions. Our flagship offering
is a unique and powerful online toolset branded as InForm. Our
user-friendly products are designed to dramatically improve
governance conformance in companies, the pension funds,
public entities and Nonprofit organisations.
InForm represents
a quantum leap in respect of corporate governance implementation
and management with a unique combination of an internal
Board and management tool with an external benchmarking
ability. Our products go beyond the familiar systems
and controls and are designed to assess and benchmark
the strength of an organization’s culture in respect
of self-regulation and accountability.
Governance Improves Financial Performance
Recent research
re-affirms a direct correlation between good corporate
governance and financial performance. In the most celebrated “governance-ranking” study
to date (Gompers et al (2004), the findings
provide clear support for the proposition that there
is a link between the quality of corporate governance,
measured in terms of shareholder rights, and financial
performance.
Corporate governance drives
profits
Companies that invest in corporate
governance will reap rewards in performance and profits,
according to research by the Association of British
Insurers, ABI.
UK firms with
good corporate governance produce 18% higher returns
than those with poor governance records and share volatility
was found to be 9% lower. Conversely, a breach of governance
best practice reduced a company’s return on assets
equating to 8.6% fall a year.
“The results confirm our belief
that good governance produces better returns with less
volatility, something that long-term savers need,” said
ABI director of investment affairs Peter Montagnon. Shareholders
investing £100 ($198) with good governance could
expect returns of £120 ($238) compared to poorly
governed firms which would produce just £102 ($202).
The research was based on 654 FTSE
All-Share companies from 2003 to 2007. |
