Bad corporate governance can be costly, but good corporate governance doesn't always have an attendant payoff, according to a Financial Executives Research Foundation Inc. survey.
Some 17% of financial executives of public companies said debt providers have told them good corporate governance will favorably affect the terms of debt agreements, according to the survey of financial executives of public and private companies on corporate governance issues. An even 50% of responding financial executives said debt providers have inquired about the status of corporate governance.
Survey respondents came from 24 public and 16 private organizations. Of the public companies, 10 were listed on the New York Stock Exchange, 10 on Nasdaq and three on the American Stock Exchange. The survey sought views on public- and private-company corporate governance activity.
Among other survey results that apply to public companies, 100% of respondents said directors or officers from lead insurance providers have inquired about corporate governance at the companies.
Exactly 50% of respondents say directors and officers insurance terms have become more unfavorable. But 67% of respondents said insurers told them good corporate governance will improve policy terms.