It’s like the wayward uncle who just won’t stay away.
Mr. Murray notes a recent study by Institutional Shareholder Services that found that stakeholders like pension and mutual funds have increasing expectations for corporate governance performance at companies in which they invest.
Here’s one example:
Is all this attention to corporate governance good for business? Many corporate executives I talk with worry about the creation of a culture of compliance in their companies. Too much executive time and attention, they fear, is spent on defensive matters like governance, accounting and complying with regulations, leaving too little time and attention on the company’s growth.
But big investors clearly believe attention to governance increases the value of their investments. Fifty-nine percent said monitoring corporate governance of companies they invest in enhances investor returns.
As more institutional investors look globally for attractive returns, corporate governance will take on an increasingly international tone. Metrics will be developed to allow sophisticated investors to keep score of best practices.
And U.S. executives who remain too focused on legislation like Sarbanes-Oxley may be looking through the wrong end of the governance telescope.