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. Corporate Charter

    A written document filed with a U.S. state by the founders of ...
  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. Investing

    Governance Pays

    Learn about how the way a company keeps its management in check can affect the bottom line.
  2. Markets

    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. Investing

    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.
  4. Investing

    What's Involved in Quality Management?

    Essentially, quality management entails overseeing all activities and tasks needed to maintain excellence.
  5. Investing

    What are Metrics?

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

    Knowing Your Rights As A Shareholder

    We delve into common stock owners' privileges and how to be vigilant in monitoring a company.
  7. Markets

    What is Capital Stock?

    Capital stock refers to the number of authorized shares a corporation may issue, both common and preferred.
  8. Personal Finance

    Explaining Corporate Tax

    A corporate tax is a tax levied on the profits a corporation generates.
  9. Markets

    Rising Prices: Inflation or Quality Improvements?

    Price indices are used to measure inflation, but qualitative improvements in products complicates attempts to isolate the true cause of rising prices.
  10. Investing

    The Basics Of Corporate Structure

    CEOs, CFOs, presidents and vice presidents: learn how to tell the difference.
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. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  2. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  3. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  4. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  5. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  6. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
Trading Center