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PurposeThis paper aims to investigate the most popular corporate governance rating systems and to scrutinize their usefulness to shareholders and the public at large. It proposes to examine whether the advertised good governance scores reflect corporate performance, fraud, lawsuits, and the like.Design/methodology/approachThe analysis focused on the methodology used by rating agencies to rank corporate governance practices of companies. Analysis of the categories and variables used in the rating systems were also scrutinized and critiqued.FindingsThis research shows that there is a weak relationship between corporate performance and corporate governance rating. Ideas and suggestions have been proposes to remedy the shortfalls of existing rating systems.Research limitations/implicationsMany researchers use corporate governance scores in their studies to investigate the relationship between these single scores and corporate performance. Potential vulnerability and risk are demonstrated using such kind of methodologies. Research should be accomplished with the corporate governance indicators separately.Practical implicationsSeveral corporate governance ratings systems have been developed and implemented. These systems reduce a complex corporate governance process and related performance into a single score. Such outcome does not in any way reflect the real nature of corporate governance or its performance. Ranking, if it is at all needed, should be interpreted carefully and not be used as a simple measurement of good or bad corporate governance practice.Originality/valueThis paper is the first of its kind to critically evaluate corporate governance systems scores launched by different rating agencies.

Under the mounting pressure from the various regulatory bodies and institutional investors, the corporate-sector has been forced to re-evaluate and continuously improve their Corporate Governance (CG) systems. Conscientious boards, nowadays, want to benchmark their companies CG policies against their peers. In fact, CG rating system can provide �useful� indication of the governance environment prevalent in different countries, and across individual companies. Due to the complexity of �specific� CG matters, there is an increasingly felt need for having a �quantitative� evaluation methodology for CG and boards. To that end, some professional rating agencies have recently started offering their services and also providing ranking �scorecards� for a fee. The ISS, GMI, TCL, S&Ps and Deminor are providing cross-border rating services to companies. Moreover, several countries have developed �CG Scorecards� that fulfills the goals defined by analysts and investors. Even though CG scorecards are not always perfect, but still they are widely accepted by the national and international financial communities. Undoubtedly, such rating systems will provide a useful �benchmark� for the investors, who identify �good� CG with a well-run and wellmanaged company. This article focuses on CG ratings as a powerful tool for evaluating the corporations & board accountability. Let us hope, �systematic� application of these rating systems, across the globe, will prove to be a �safety valve� to control fraud and mismanagement in the long-term.

PurposeThis paper aims to examine whether the corporate governance rankings published by a market information intermediary are reflected in the values that investors accord to firms.Design/methodology/approachPanel data from 289 Canadian firms in the four‐year period 2002‐2005 were analyzed using a price model.FindingsThe results suggest that the corporate governance rankings published by the market information intermediary are related to not only firm market value, but also to accounting results.Practical implicationsThis study provides empirical observations that would be useful for various organizations involved in the regulation of corporate governance practices and the standardization of relevant data elements.Originality/valueThis study contributes to the literature by demonstrating that information published by an information intermediary is reflected in firm market values. Moreover, this information appears to be related to the accounting results. Thus, good governance rankings are reflected in the accounting results.

The paper presents a synthesis and analysis of corporate governance guidelines of the twenty-five European Union member states. The papes focuses on observable and quantitiable aspects of covernance including key aspects pertaining to the conpositionand operation of the board of ditectors, audit committee.

ABSTRACTManuscript Type: EmpiricalResearch Question/Issue: Prior studies have failed to unequivocally establish a positive relationship between corporate‐governance ratings and company performance, although theoretically, we would expect to find one. In this paper, we try to establish whether a positive relationship exists through modeling the relationship more carefully.Research Findings/Insights: After controlling for selection bias and endogeneity simultaneously, we find a significant positive relationship between corporate‐governance ratings and performance. However, the strength of this relationship seems to depend on the quality of the institutional environment. Finally, we find that improvements in corporate‐governance ratings over time result in decreasing marginal benefits in terms of performance.Theoretical/Academic Implications: Our paper contributes to the literature by showing that improved corporate‐governance ratings lead to better performance, but that econometric problems might obscure this relationship. We also show that for a sample of developed countries the institutional environment affects the relationship between governance ratings and performance. Finally, this paper contributes to the literature on the impact, regarding compliance and effectiveness, of codes of good governance.Practitioner/Policy Implications: Our results are relevant for both companies and policy makers. They indicate that companies can improve performance by adhering to good corporate‐governance practices. For policy makers, the findings suggest that soft laws and the invisible hand of the market lead to companies improving their corporate governance.

We aim at answering whether it is more noteworthy for investors to attain or sustain corporate governance goals by examining how the market reacts towards announcements regarding corporate governance ratings (CGR) and corporate governance index (XCORP) including the firms listed in Borsa Istanbul within the sample period of 2007-2018 using a standard event study methodology. We found that, although both announcements produce relatively weak signals, joint announcements made upon XCORP inclusions along with first ever CGR (attainment) have more significance when compared to single announcements of subsequent CGR (sustainment) in the pre-event period. However, we also determined that the impact of subsequent CGR announcements in the post-event period was more profound. Our results revealed that the market anticipates XCORP inclusions whereas subsequent CGR are unexpected. Besides, the weak support for signaling hypothesis was considered to result from the obscuring effects of current legislation and market practices.

This paper aims to examine the impact of Good Corporate Governance (GCG) practice on bank stability and performance. Governance is measured using the GCG rating that covers eleven aspects. The authors apply instrumental regression to link governance to performance and stability. The study covers a sample of 150 banks. The result shows that bank stability can mediate bank governance and bank performance. On the determinant of bank performance, it can be concluded that the GCG rating is positive and directly influences bank performance. Bank stability is also positive for bank performance indicating the indirect contribution of the GCG rating to bank performance. NPL, LDR, CAR and bank's size (LASSET) are all negative and significant. The aim of this paper is to provide strong empirical evidence on the importance of governance and stability for performance. The limitations of this paper are the size of the sample and that it only covers public banks which are theoretically required to apply better governance in all aspects of their business by the Capital Market Authority.

Bu çalışmanın amacı; Türkiye'de faaliyette bulunan Borsa İstanbul (BİST) Kurumsal Yönetim Endeksi (XKURY) içerisinde yer alan halka açık şirketlerin hisse senedi değerleri üzerinde kurumsal yönetim derecelendirme notlarının etkisini analiz etmektir. Bu kapsamda 2016-2020 dönemlerinde Kurumsal Yönetim Endeksinin içerisinde yer alan firmaların, derecelendirme notları belirlenmiştir. Araştırma yöntemi olarak Eşleştirilmiş Bağımlı Örneklem t-Testi'nin kullanıldığı çalışmada derecelendirme notların açıklandıkları tarihlerden otuz gün önce ve otuz gün sonra zaman aralığında kalan tarihlerde oluşan hisse değerlerinin farkları incelenmiştir. Elde edilen sonuçlara göre 2016, 2017 ve 2019 döneminde kurumsal yönetim ilkelerini uygulayan şirketlerin hisse senedi değerleri üzerinde istatistiki olarak anlamlı bir etki olduğu görülürken, 2018 ve 2020 yıllarında makro düzeyde meydana gelen sistematik riskler nedeniyle bu yıllar için istatistiki bakımdan anlamlı bir etki görülememiştir.

ABSTRACT Corporate govemance index (CGI) is a quite new concept in Turkey. As a promising emerging country and a candidate for EU accession, Turkey needs both structural changes and an ongoing development and harmonization of its capital market legislation. Hence, the use of corporate govemance (CG) framework and the modem intemal auditing techniques could enable Turkey not only to manage its own risks better but also to increase the market's confidence in its commitment to sound fiscal and monetary policies. In this paper, we analyze the listed companies' corporate govemance and internal auditing performance metrics which have gained the relevant rating scores based on the Corporate Govemance Principals of Turkey. This rating reflects a good overall performance of the company regarding its current corporate govemance structures as measured against the Principles of the Turkish Capital Markets Board (CMB). In this way, we aim to increase the awareness on the importance of corporate govemance framework, CG issues and the benefits of relying on modem intemal auditing techniques to achieve strategic goals for Turkish companies in the future. We also intend to contribute the improvement in these fields of work. Corporate govemance index (CGI) is a quite new concept in Turkey and unfortunately the number of companies at GCI is surprisingly low as compared to the number of listed companies at İstanbul Stock Exchange (İSE), i.e. 319. There are only 18 listed companies accepted to this index. For this reason, we could not apply any econometric analysis with such a limited of samples in our hands rather; we could only be able to use descriptive analysis. But, to our knowledge, this is the first study using the data of the companies listed in İstanbul Stock Exchange Corporate Govemance Index (CGI) in Turkey in connection with the related variables. Due to data constraints we prefer the non-financial companies which have corporate govemance ratings to make a sound comparison with the Institute of Internal Auditors (IIA) ...