What is Corporate Governance?
Corporate governance is the system of rules, procedures and processes by which a company is controlled and directed. In practice, governance is concerned with balancing the combined interests of a company’s stakeholders, including shareholders, management, staff, customers, suppliers and the community in which it operates.
The board of directors is pivotal in influencing and implementing good governance. The board appoints corporate officers and makes important decisions, such as executive compensation and dividend policy. Proxy advisors and shareholders are important stakeholders, which can have major implications for equity valuation.
CGLytics provides the necessary tools that are central to good governance. Our services help promote transparency in companies’ corporate governance practices and promote informed dialogue between a company, its investors and other relevant stakeholders.
We provide access to high-quality corporate governance data, analytics and actionable insight through a single access. Our market and data insight helps companies manage reputational risk and identify issues that are of potential concern to shareholders. We give investors access to granular data, unique information and screening tools so they can make well-informed decisions.
Good corporate governance implements a transparent set of rules to ensure that shareholders, directors and officers have aligned incentives. But good governance can also be seen as a mark of good corporate citizenship and ethical behaviour.
With its many stakeholders, corporate governance must balance the need for short-term earnings with the strategic objectives of the company. In practice, good governance must encompass all areas of management and become part of a company’s DNA.
Although shareholders do not have a right to proxy access, some companies have implemented it on a voluntary basis, for example to help ensure the right mix of skills in the boardroom.
A strong board is fundamental to good governance. A good board will comprise a diverse group of multi-talented people who combine insight and good judgement to ensure that the company implements good governance and maintains its market share. A successful board must be well informed and decisive.
Understanding ESG & Annual Incentive Plan ESG refers to a series of environmental, social and governance criteria taken into consideration by the funds during the investing process. Investing in ESG funds allows shareholders to support companies in transition, that wish to act and develop in a more sustainable and responsible manner. In practice, many indicators … Continue reading “Understanding ESG & Annual Incentive Plan”
Pay for Performance: The Largest Institutional Investors’ View Executive compensation has been one of the trickiest issues within the corporate governance space as of late. Across the board, there seems to be no end in sight to finding the perfect compensation package or philosophy for corporate executives. In this article, we will discuss the … Continue reading “Pay for Performance: The Largest Institutional Investors’ View”
How to design your peer group for compensation benchmarking Given the scrutiny on executive compensation in recent years, it is critical to make sure that your company’s executive pay reflects its performance and aligns with the market. Therefore, it is essential for companies to have an appropriate peer group for performance benchmarking, compensation program … Continue reading "How to design your peer group for compensation benchmarking"