The Stars Have Aligned .... Sort of

April 9, 2008

The Stars Have Aligned ... Sort Of

• 87% of advisors and 88% of investors see a close connection between effective corporate governance and a company's reputation. Thus, the perception of boards as operating in management's interests - not shareholders' - is problematic for corporate reputation, as boards' alignment with shareholders is a fundamental corporate governance issue.
• 82% and 71% of financial advisors and high-net-worth investors, respectively, believe reputation accounts for more than 20% of a company's market value, compared to only 29% and 20%, respectively, who think boards account for more than 20% of market value.
• Despite the time and cost invested in Sarbanes-Oxley compliance since the law's passing in 2002, a relatively small percentage of respondents (13% of financial advisors and 12% of high-net-worth investors) believe that corporate governance practices have improved "a great deal" since the act's passage.
• 45% of financial advisors and 43% of high-net worth individuals think that post-Sarbox governance practices have improved only "a moderate amount."
• 56% of financial advisors and 41% of high-net-worth investors said a board accounts for more than 10% of a company's share value.