Corporate Governance Ratings

Abstract

The article focuses on the principles of corporate governance and how rating services affect the companies and the investors regarding the subject. Corporate governance is the concept of applying transparency, shareholder rights and accountability to the entities. In the near future, several rating services were born, influencing investors and companies by grading them on the degree of how well they apply corporate governance principles. Recent studies concluded that performance is directly related to the rating a company receives on corporate governance practices. Corporate Governance looks at the institutional and policy framework for corporations - from their very beginnings, in entrepreneurship, through their governance structures, company law, privatisation, to market exit and insolvency. The integrity of corporations, financial institutions and markets is particularly central to the health of our economies and their stability.' OECD