TY - JOUR
T1 - Understanding the determinants of RiskMetrics/ISS ratings of the quality of UK companies' corporate governance practice
AU - Hussainey, Khaled
AU - Al-Najjar, Basil
PY - 2012/12/1
Y1 - 2012/12/1
N2 - We examine the determinants of RiskMetrics/ISS Ratings of the quality of UK companies' corporate governance practice and investigate whether corporate governance mechanisms and firm specific characteristics affect these ratings. We also investigate the association between firms' financial distress and these ratings. Using data for nonfinancial Financial Times Stock Exchange (FTSE) 250 firms over the 2003 to 2009 period, we find that board independence, managerial ownership, institutional ownership, firm size, and profitability are associated with firms' corporate governance ratings. In addition, we find that more independent directors on the board, more institutional ownership, and larger size lead to a high level of board-related ratings. Finally, we find no association between corporate governance ratings and financial distress.
AB - We examine the determinants of RiskMetrics/ISS Ratings of the quality of UK companies' corporate governance practice and investigate whether corporate governance mechanisms and firm specific characteristics affect these ratings. We also investigate the association between firms' financial distress and these ratings. Using data for nonfinancial Financial Times Stock Exchange (FTSE) 250 firms over the 2003 to 2009 period, we find that board independence, managerial ownership, institutional ownership, firm size, and profitability are associated with firms' corporate governance ratings. In addition, we find that more independent directors on the board, more institutional ownership, and larger size lead to a high level of board-related ratings. Finally, we find no association between corporate governance ratings and financial distress.
KW - Corporate governance mechanisms
KW - Corporate governance ratings
KW - Financial distress
KW - Firm-specific characteristics
KW - UK
UR - http://www.scopus.com/inward/record.url?scp=84873695201&partnerID=8YFLogxK
U2 - 10.1002/CJAS.1227
DO - 10.1002/CJAS.1227
M3 - Article
AN - SCOPUS:84873695201
VL - 29
SP - 366
EP - 377
JO - Canadian Journal of Administrative Sciences
JF - Canadian Journal of Administrative Sciences
SN - 0825-0383
IS - 4
ER -