GovernanceMetrics International gave its highest corporate governance rating to 34 of 3,220 global companies. Of the companies receiving the top score, 27 were American, three Canadian, three British and one Australian. The companies include 3M Co., Colgate-Palmolive Co., Eastman Kodak Co., General Electric Co., General Motors Corp., Gillette Co., Lockheed Martin Corp., PepsiCo Inc., Procter & Gamble Co., BCE Inc., BP PLC and Westpac Banking Corp.
A sample portfolio comprising one share of each of the 34 companies outperformed the S&P 500 index as measured by total returns for each of the last one-, three- and five-year periods by 11.13, 9.9, and 15.93 percentage points, respectively, as of Feb. 28, according to GMI.
Ratings range from 1 to 10, with 10 being the highest. The average rating for U.S. companies was 7.03, down from 7.23 in September. Gavin Anderson, GMI president and CEO, blamed the S&P 600 small-cap companies, which were included in the GMI ratings for the first time and "as a group have governance profiles that are weaker than their large-cap brethren."
U.K. companies averaged the highest rating, at 7.39; followed by those in Canada at 7.14; United States, 7.03; and Australia, 6.99. Greek companies had the lowest average rating, at 2.37, followed by Japan at 3.49; Belgium, 3.93; France, 4.05; and Portugal, 4.35.
Thirty-two companies received GMI's lowest global rating of 1.0.