Tag Archives: organizational effectiveness

2013-05-25 by: James Bone Categories: Risk Management Standard and Poors grade Corporate Governance: Only 6% get an A


As of May 2013, Standard & Poors has completed its evaluation of non-financial firm management and governance factors for 2,190 publicly and privately rated North American companies and the results are dismal.  S&P has also scored a global score to 3,868 firms with only 8% receiving its highest rating.

 “Standard & Poors uses the management and governance scores to modify its evaluation of an enterprise business risk profile, a key component of its credit rating.”  S&P’s methodology uses 15 criteria for evaluating corporate governance across five categories. 

The categories include:

  • Management, which includes;

  • Strategic positioning,

  • Risk management/financial management, and;

  • Organizational effectiveness; and

  • Governance

“The Management and Governance criteria for nonfinancial companies consist of eight management subfactors and seven governance subfactors. Depending on how an entity scores along these subfactor dimensions, S&P issues one of four scores: strong, satisfactory, fair, and weak.”

6% of firms scored “Strong”

26% of firms scored “Satisfactory”

65% of firms scored “Fair”

3% of firms scored “Weak”

In its May 13, 2013 press release, S&P disclosed the names of those companies that received a “Strong” or “Weak” designation. See the list in the May 13, 2013 press release.

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