NEW YORK & GIG HARBOR, Wash.--()--GMI Ratings today announced it has signed a licensing agreement with Global Index Group to develop corporate governance indices. The new set of indices will incorporate non-traditional risk metrics developed by GMI Ratings.
“The AGR rating reflects accounting and governance practices statistically associated with SEC enforcement actions, litigation, and other events likely to cause precipitous contractions of equity value”
Mr. James Kaplan, Chief Executive of GMI Ratings, stated: “Following the merger of the three leading governance firms that pioneered non-traditional measurements of investment value and risk, the logical next step was to apply the Accounting and Governance Risk (AGR®) rating to the creation of an index that reflects the impact of corporate governance practices.”
Kelly Haughton, Chief Executive Officer of the Global Index Group and, formerly, the creator of the Russell index family, said: “This agreement gives us what we feel is the best data for corporate governance with which to build an index that will allow institutional funds and others to incorporate this important risk factor into portfolio strategies. For fiduciaries truly concerned about avoiding the next Enron or Lehman, using the index to integrate governance insights more fully into the investment process is an essential step.”
“The AGR rating reflects accounting and governance practices statistically associated with SEC enforcement actions, litigation, and other events likely to cause precipitous contractions of equity value,” added Mr. Kaplan. “Therefore, GIGHGI is a logical investment vehicle for asset owners and managers who want to reduce exposure to these risks.”
GMI and GIG expect to have the index available for licensing within the next 60 days and are already in discussion with one investment management organization interested in licensing the new index to run an index fund.
About GMI Ratings
GMI Ratings is an independent provider of research and ratings on environmental, social, governance and accounting‐related risks affecting the performance of public companies. The firm’s ESG ratings for nearly 5,500 companies worldwide incorporate 120 ESG KeyMetrics™ to help investors assess the sustainable investment value of corporations. The firm also provides Accounting and Governance Risk (AGR®) ratings and corresponding litigation probabilities for approximately 18,000 public companies worldwide. AGR metrics reflect the accuracy and reliability of a company’s financial reporting. Clients of GMI Ratings include leading investment managers, asset owners, insurers, auditors, regulators and corporations seeking to incorporate accounting and ESG factors into risk assessment and decision‐making. A signatory to the Principles for Responsible Investment (PRI), GMI Ratings was formed in 2010 through the merger of GovernanceMetrics International, The Corporate Library and Audit Integrity. In the 2012 Independent Research in Responsible Investment (IRRI) Survey conducted by Thomson Reuters Extel and SRI‐CONNECT.com, GMI Ratings was named “The Best Independent Corporate Governance Research Provider”. For more information please visit www.gmiratings.com.
About GIG, LLC
Global Index Group (GIG) is an independently-owned global financial services company that creates innovative indexes for use in exchange traded funds, notes and trusts (known as "ETPs" exchange traded products). With their deep knowledge and expertise within the index-based sector, they identify opportunities and produce unique first-to-market index products to various markets and regions of the world. For more information, please visit www.globalindexgroup.com.