The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Tue, 03 Nov 2026 14:42:56 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.14 https://corpgov.law.harvard.edu/wp-content/uploads/2024/02/cropped-photography-4-e1706898544564-1-32x32.png RiskMetrics’ Introduces New Governance Measurement for Proxy Voting Reports – The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu 32 32 RiskMetrics’ Introduces New Governance Measurement for Proxy Voting Reports https://corpgov.law.harvard.edu/2010/03/21/riskmetrics-introduces-new-governance-measurement-for-proxy-voting-reports/?utm_source=rss&utm_medium=rss&utm_campaign=riskmetrics-introduces-new-governance-measurement-for-proxy-voting-reports https://corpgov.law.harvard.edu/2010/03/21/riskmetrics-introduces-new-governance-measurement-for-proxy-voting-reports/#comments Sun, 21 Mar 2010 15:54:22 +0000 http://blogs.law.harvard.edu/corpgov/?p=7980?d=20150120103133EST Posted by Margaret E. Tahyar, Davis Polk & Wardwell LLP, on Sunday, March 21, 2010
Editor's Note:

Margaret E. Tahyar is a partner and member of the New York Financial Institutions Group at Davis Polk & Wardwell LLP. This post is based on a Davis Polk General Counsel Update by Ning Chiu and William M. Kelly. Another Davis Polk General Counsel Update, available here, includes information and advice on preparing for the new Governance Risk Indicators. A detailed critique of the CGQ system and its methodology can be found in a discussion paper issued by the HLS Program on Corporate Governance, The Elusive Quest for Global Governance Standards, by Lucian Bebchuk and Assaf Hamdani, which was described on the Forum here.

RiskMetrics Group has recently overhauled its core corporate governance yardstick. Highlights for U.S. companies:

  • The Corporate Governance Quotient (CGQ), which for the past several years has ranked companies, both within their industry and on a broader basis, according to their overall adherence to RMG’s notions of governance best practices, is being discontinued as of June 2010.
  • RMG is adopting a new approach as of March 2010 called Governance Risk Indicators (GRId), which will be applied to all of the 6,400 U.S. companies that it reviews.  Under the GRId system governance practices will be grouped into four headings — Board Structure, Shareholder Rights, Compensation and Audit — and a color-coded risk assessment — High, Medium or Low Concern — will be applied to each category for each company.  These assessments will be made on an absolute rather than a relative basis.
  • The implementation timetable will affect companies with annual meetings after late-March 2010, as companies will start seeing the GRId appear on their proxy research reports beginning in early March for those meetings.
  • RMG is also abandoning its practice of “certifying” director education programs.

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