ASSET4 Equity Performance Study
Significant correlation between good corporate governance and equity performance
Since the end of the 1990s, investor interest has been directed increasingly at corporate governance. What has prompted this interest is not so much management misconduct as the realization on the part of many institutional investors that, given the rules of incorporation and the volume of invested assets under management, the value of their portfolios can only be enhanced by means of direct and intense influence on the development of the individual companies. Particular emphasis has since been given to matters of corporate governance, although until very recently no direct connection could be established between corporate governance and share price movements. However, this connection has now been established by a study which furnishes empirical evidence of a significant correlation between good corporate governance and equity performance.
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