Small caps reduce US governance score

Small cap companies have weaker governance structures than large cap concerns, according to corporate governance research and ratings agency, GovernanceMetrics International (GMI), which has released it latest governance ratings on 3,220 global companies.

For the first time, the research included the US S&P Small Cap 600 index and it was found that these companies had the largest number of the “red flags” which GMI issues for governance concerns, and proportionally represented a greater number of low scoring companies. Their inclusion has resulted in a decline in the average score of US companies from 7.23 last September to 7.03 today (out of a top score of 10).

See full Manifest-i Article.