Global index provider FTSE Group (FTSE) and corporate governance leader Institutional Shareholder Services (ISS) released the first phase of their joint FTSE ISS Corporate Governance Index (CGI) Series today.
FTSE and ISS created this new index series in response to investor demand for better and more accessible tools to help assess and manage the impact corporate governance practices may have on investment portfolios.
The new series contains a group of six equity indexes, with a corporate governance overlay. It includes companies from a universe of 2,300 constituent companies from 24 developed markets.
The six indexes which go live today, are:
FTSE ISS Developed CGI (covering large and mid cap stocks);
FTSE ISS Europe CGI (covering large and mid cap stocks);
FTSE ISS Euro CGI (covering large and mid cap stocks);
FTSE ISS Japan CGI (covering large and mid cap stocks);
FTSE ISS US CGI (covering large and mid cap stocks);
FTSE ISS UK CGI (covering large, mid and small cap stocks).
ISS' corporate governance ratings form the foundation of the index. Through its Corporate Governance Quotient (CGQ), ISS rates more than 7,500 companies, providing investment managers a valuable risk management tool. Initially launched in 2002, CGQ helps institutional investors make more informed investment decisions by leveraging corporate governance to mitigate risk and drive value. CGQ has become the industry standard metric for evaluating companies' corporate governance performance.
Mark Makepeace, Chief Executive, FTSE Group said, "By creating the CGI Series, we are taking an important first step in creating an accessible framework to assess corporate governance risk within international portfolios. By adopting an open and phased approach to creating this series, we hope that listed companies and investors alike will engage with FTSE and ISS to increase transparency about corporate governance practices and contribute to the development of a global market standard."
The results of the first FTSE/ISS CGI Series review will be announced in March 2005.
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