Corporate governance research will take a huge leap forward with the creation of a database by the new Arthur and Toni Rembe Rock Center for Corporate Governance, established by Stanford Law School in Stanford, Calif.
The center plans to create a corporate governance database "that will provide timely, detailed, and sophisticated information about the governance characteristics of all major publicly traded corporations," a law school statement said.
It will enable users to develop their own research and analytics, such as generating governance scoring systems using a wide variety of factors. The center will make the database available to the public at no charge.
The database promises to be a powerful research tool that could serve to promote academic and practitioner research in corporate governance. It would be similar to how the Center for Research in Security Prices at the University of Chicago, became, as CRSP statement notes, "an integral part of the academic and corporate world of financial and economic research" after its founding in 1960.
Dan Siciliano, executive director of the Program in Law, Economics and Business at the Stanford Law School, who is overseeing development of the database, said the CRSPanalogy has occurred to a number of people.
"My uninformed hunched is it will be pretty cool," remarked Abbie J. Smith, professor of accounting at the University of Chicago's Graduate School of Business, who is a board member of Dimensional Fund Advisors Inc.'s U.S. mutual funds and does academic research in corporate governance.
Howard Sherman, chief operating officer at GovernanceMetrics International Inc., a New York firm that creates global corporate governance rankings, said: "It remains to be seen what they will build; it could be a potential new source of data for us."
Mr. Siciliano said he expects the database, which will be called Open Source Corporate Governance Reporting System, to be fully available next year.
"We're in the process of forming a board of industry, academic and policymakers to identify 75 to 150 datapoints to be tracked" in the database, he said. The database will cover only companies listed in U.S. markets, although he envisions it adding international companies in the future.
"The database will allow others to create a formula to score companies any way they want," Mr. Siciliano said. The center won't produce scores.
He said the center will start with 2006 corporate data, although it may go back to 2005.
The center "won't be inventing anything new" in the database, he added. "But it will make it much easier to gather information in one place and manipulate the data for research."
Arthur Rock, a pioneer in venture capital, and Toni Rembe, his wife, donated $10 million in startup funding for the center, which plans also to offer a variety of other corporate governance -related programs.
Stanford Law School already operates the Securities Class Action Clearinghouse, a significant resource of court filings and settlement information on corporate securities litigation; a continuing education program for corporate directors; the Fiduciary College, an educational program for public- and private-sector fund fiduciaries; and the Stanford Institutional Investors Forum, a program for large and sophisticated institutional investors.
With the new center, Stanford, already a valuable source of corporate research and data, will further extend its usefulness to investors and corporate officials alike.