Evaluation of corporate governance systems by credit rating agencies

Amir Louizi () and Radhouane Kammoun ()
Additional contact information
Amir Louizi: IDRAC Business School
Radhouane Kammoun: TELECOM-Lille, Institut Mines-Télécom and University of Lille (RIME Lab)

Journal of Management & Governance, 2016, vol. 20, issue 2, No 8, 363-385

Abstract: Abstract In periods of high market volatility, and in order to minimize their risks, some investors prefer to invest their funds in well-governed companies. This paper aims to describe the methodology used by rating agencies to assess corporate governance systems (CGS) and to compare agencies’ practices. More and more the shareholders and creditors incorporate mechanisms related to CGS in the assessment of risks. Using a sample of five rating agencies, we distill 51 governance criteria to two governance factors using principal components analysis. The first factor represents the “shareholders rights and board of directors”. The second one is related to “remuneration policy and convergence of interests for shareholders and managers”. We identify three different business models for the corporate governance rating process.

Keywords: Corporate governance; Criteria; Credit rating agencies; Principal components analysis (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://link.springer.com/10.1007/s10997-015-9331-3 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:jmgtgv:v:20:y:2016:i:2:d:10.1007_s10997-015-9331-3

Ordering information: This journal article can be ordered from
http://www.springer. ... 29/journal/10997/PS2

DOI: 10.1007/s10997-015-9331-3

Access Statistics for this article

Journal of Management & Governance is currently edited by Lino Cinquini

More articles in Journal of Management & Governance from Springer, Accademia Italiana di Economia Aziendale (AIDEA) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().