Overview: The purpose of this paper is to inform the marketplace of the approach to evaluating and incorporating the quality of a company's corporate governance within the overall credit ratings process.
While Fitch always has taken aspects of corporate governance into account, this report formalizes a more systematic framework for reviewing governance practices that affect credit quality and builds on recently completed research. Fitch will continue to refine its analytical approaches and to reflect key trends and drivers affecting governance quality as the field evolves. Fitch's framework is grounded in agency theory and defines corporate governance from a creditor perspective.
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