CORPORATE GOVERNANCE RATING (CGR)

The CGR model evaluates the following areas of a company:
  • Financial transparency
  • Corporate discipline
  • Independent oversight
  • Management of shareholder interests
  • Corporate social responsibility (CSR)
The Financial transparency criteria assess whether a company adopts prudent accounting practices, reasonable compensation policy, and whether returns are fairly distributed between the company, shareholders and its employees.

The Corporate discipline criteria assess whether a company understands its core competences, its future growth areas; how well the management is prepared for business and operational risks, and the composition and renewal of the Board.

The Independent oversight criteria assess whether the crucial administrative bodies in a company is sufficiently independent. They include the audit and compensation committees.

The Management of shareholder interests criteria assess whether minority shareholder interests are properly managed.

The CSR criteria assess the company's ability and willingness to be proactive in addressing the environmental and social concerns, and whether it engages with the community in a positive manner.

Governance assessment is embedded in all five criteria ranging from board succession in the Corporate discipline to the re-appointment procedures of auditors and the % of non-audit work carried out by auditors as measured in Financial transparency.

Each criteria have different weightings ranging from 44% for financials and 10% for the management of shareholder interests. These weightings are regularly reviewed to incorporate market developments and expectations on what entails good corporate governance and corporate social responsibility.

Each company is rated according to the same criteria with a full mark of 100.