BRUSSELS -- European investors interested in corporate governance at European companies now have a new tool available. Deminor, a Brussels-based proxy voting and research firm, has launched the European Corporate Governance Rating Service.
The service covers all of the companies in the major stock indexes of six European countries: the Financial Times 30, DAX 30, CAC 40, AEX 25, SX 16 and BEL 20.
Several institutional investors already have subscribed to the service: Hermes, the largest pension fund in the United Kingdom; DWS, the largest mutual fund manager in Germany; Pensioenfonds PGGM, one of the largest pension funds in The Netherlands; Richelieu Finance, a proactive investment manager in France; and SPP, the largest pension fund in Sweden.
"The launch of the rating service is the result of a major breakthrough in the field of corporate governance, as corporate governance standards in European companies will be scrutinized across borders against a common benchmark," said Nicholas Caprasse, a partner in Deminor. "Investors will be empowered to use this benchmark not only in their voting strategies, but also in their investment decisions."
The benchmark consists of an extensive analysis matrix combining more than 70 corporate governance indicators in four main categories: rights and duties of shareholders; the absence of takeover defenses; disclosure; and board structure.
Each company is given a rating in each of the four categories, on a scale from A, representing the best practices, to E, for the most questionable practices.