Corporate Governance Quotient - CGQ

DEFINITION of 'Corporate Governance Quotient - CGQ'

A metric developed by Institutional Shareholder Services (ISS) that rates publicly traded companies in terms of the quality of their corporate governance. Each public company covered by the metric is assigned a rating based on a number of factors that are considered by the ISS model. Factors used in the CGQ formula include board structure and composition, the executive and director compensation charter, and bylaw provisions.

BREAKING DOWN 'Corporate Governance Quotient - CGQ'

The CGQ serves as a reasonable approximation of the quality of a public firm's corporate governance. Investors seeking to hold shares in a company for the long term will typically be concerned about the quality of their company's corporate governance, as research has shown that a high quality of corporate governance typically leads to enhanced shareholder returns.

RELATED TERMS
  1. Shareholder Value Transfer - SVT

    A metric intended to guide shareholders in how much equity compensation ...
  2. Corporate Governance

    The system of rules, practices and processes by which a company ...
  3. Corporatization

    The act of reorganizing the structure of government owned entity ...
  4. Quality Management

    The act of overseeing all activities and tasks needed to maintain ...
  5. Shareholder

    Any person, company or other institution that owns at least one ...
  6. Public Company

    A company that has issued securities through an initial public ...
Related Articles
  1. Fundamental Analysis

    Ethical Investing: Corporate Governance

    By Amy Fontinelle Corporate governance looks at how companies manage themselves and their relationships with shareholders and stakeholders. Ethical investors want to make sure that corporations ...
  2. Investing

    Corporate Governance

    Corporate governance refers to the formally established guidelines that determine how a company is run. The company’s board of directors approves and periodically reviews the guidelines, which ...
  3. Markets

    Fundamental Analysis: Qualitative Factors - The Company

    By Ben McClureBefore diving into a company's financial statements, we're going to take a look at some of the qualitative aspects of a company. Fundamental analysis seeks to determine the intrinsic ...
  4. Investing Basics

    What is a Public Company?

    A public company has sold stock to the public through an initial public offering (IPO) and that stock is currently traded on a public stock exchange.
  5. Economics

    What's Involved in Quality Management?

    Essentially, quality management entails overseeing all activities and tasks needed to maintain excellence.
  6. Term

    What are Metrics?

    Metrics are tools that measure a company’s performance.
  7. Investing Basics

    Knowing Your Rights As A Shareholder

    We delve into common stock owners' privileges and how to be vigilant in monitoring a company.
  8. Investing Basics

    What is Capital Stock?

    Capital stock refers to the number of authorized shares a corporation may issue, both common and preferred.
  9. Investing News

    A New Corporate Governance Initiative In Japan

    Expectations are low that Japan can create a corporate governance climate that meets global standards, but a new initiative is aimed at doing just that.
  10. Economics

    Explaining Corporate Tax

    A corporate tax is a tax levied on the profits a corporation generates.
RELATED FAQS
  1. What's the most expensive man-made object ever built?

    Learn about the most expensive man-made item ever built, who paid for it, why it cost so much, and whether the return on ... Read Answer >>
  2. What are the different groups involved in corporate governance?

    Learn about the challenges inherent to defining and executing corporate governance, and understand why different groups work ... Read Answer >>
  3. How does limited government affect corporate citizens?

    Read about the role of consumers and governments, especially limited governments, in supporting or requiring good corporate ... Read Answer >>
  4. Why has emphasis on corporate governance grown in the 21st century?

    Understand the key features of corporate governance and the factors that have led it to grow significantly in importance ... Read Answer >>
  5. How do a corporation's shareholders influence its Board of Directors?

    Find out how shareholders can influence the activity of the members of the board of directors and even change official corporate ... Read Answer >>
  6. What are some of the key reasons a large corporation might prefer to remain a private ...

    Understand the reasons why a large corporation would want to remain as private instead of going public through an initial ... Read Answer >>
Hot Definitions
  1. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  2. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  3. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  4. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  5. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  6. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
Trading Center