Understanding the determinants of RiskMetrics/ISS ratings of the quality of UK companies’ corporate governance practice

Hussainey, Khaled and Al-Najjar, Basil (2012) Understanding the determinants of RiskMetrics/ISS ratings of the quality of UK companies’ corporate governance practice. Canadian Journal of Administrative Sciences.

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Abstract

We examine the determinants of RiskMetrics/ISS Ratings of the quality of UK companies' corporate governance practice and investigate whether corporate governance mechanisms and firm specific characteristics affect these ratings. We also investigate the association between firms' financial distress and these ratings. Using data for nonfinancial Financial Times Stock Exchange (FTSE) 250 firms over the 2003 to 2009 period, we find that board independence, managerial ownership, institutional ownership, firm size, and profitability are associated with firms' corporate governance ratings. In addition, we find that more independent directors on the board, more institutional ownership, and larger size lead to a high level of board-related ratings. Finally, we find no association between corporate governance ratings and financial distress.

Item Type: Article
Article Type: Article
Uncontrolled Keywords: corporate governance ratings;corporate governance mechanisms;firm-specific characteristics;financial distress;UK
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HG Finance
Divisions: Faculty of Business, Computing and Applied Sciences > Business School > Business and Human Resource Management
Research Priority Areas: Applied Business Research
Depositing User: Ineke Tijsma
Date Deposited: 25 Mar 2015 18:06
Last Modified: 29 May 2015 10:08
URI: http://eprints.glos.ac.uk/id/eprint/1558

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