Companies with best corporate governance practices yield higher returns for shareholders than their poorly governed peers such as troubled British mortgage lender Northern Rock, new research showed on Wednesday.
A hundred pounds ($197) invested in a "blue-topped" firm -- which complies with Britain's Combined Code on Corporate Governance and whose procedures, director pay and other features satisfy shareholders -- grows over five years to 120 pounds, and only to 102 pounds if invested in a worst-governed "red-topped" company, said the Association of British Insurers (ABI).
"Good governance produces better returns with less volatility -- something long-term savers need," director of investment affairs at the insurance industry trade body, Peter Montagnon, said in a statement.
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