Corporate scandals and emerging market corporate governance concerns have lead to an increase in the use of global good-company guideposts, adding new complexity to the investor relations function.
As a result of the up tick in corporate scandals in the first half of the decade, the global investment community has turned to indices and governance services that identify well-governed companies and attempt to draw a parallel between corporate governance and equity performance.
The push to highlight good governance isn't just as a result of U.S. scandals. Singapore-based China Aviation Oil earlier this month issued suspension sentences to its chief and four top officials after management was charged with fraud and dishonesty.
The increase in demand for such indices can also be related to increases in cross-border investment. Large global institutional investors recently have taken significant positions in Asian and Eastern European companies.
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