Yet more evidence is emerging that while investing in companies with good corporate governance may not lead to better returns, investing in well run companies and those following good climate change policies just might.
Reputex, an investment research and consulting firm which aims to quantify the impact of emerging risks such as corporate governance, carbon and geo-political risk, has just released its February 2008 share price performance indices.
According to the RepuTex Governance Leaders Index (GLI), which monitors ASX-listed companies displaying positive corporate governance credentials, companies with good corporate governance match the S&P/ASX 300 over one month but under-performs it over one and three years.
For example, one month GLI returns came in at –1.4 per cent matching the S&P/ASX 300 but over one year the GLI scored –9.0 per cent compared to the S&P/ASX 300 which scored –4.5 per cent. Over three years the GLI scored 9.1 per cent per annum compared to the S&P/ASX 300 which scored 10.1 per cent per annum.
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