Proxy advisory firm ISS has expanded coverage of its ISS Governance QuickScore corporate governance scoring system to include companies in China, India and South Korea as the firm seeks to broaden its reach beyond developed markets.
ISS will add a combined 200 firms from the three countries, bringing its QuickScore coverage to a total of 4,700 companies in 30 global capital markets, the firm says in a press release. QuickScore now includes 99 companies from South Korea, 70 from India and 59 from China.
`Whether monitoring related-party transactions with significant shareholders or the prevalence of director stock ownership, QuickScore now provides access to data and analytics needed to effectively manage governance risk in emerging markets,’ says Marija Kramer, head of product development for ISS. `The increase in coverage marks an important development in the evolution of QuickScore, the universe for which now includes the Russell 3000, MSCI EAFE, ASX 200, MSCI Emerging Markets in Brazil and South Africa, and other major indices.’
The firm says the three new countries differ significantly in terms of gender diversity, board independence, related-party transactions and other aspects of governance.
India has the greatest board diversity, with 83 percent of the Indian companies covered by QuickScore including at least one woman on their board, partly due to recent regulations requiring this. Only 63 percent of Chinese companies and 12 percent of South Korean firms have at least one woman on their boards.
Board leadership also varies widely, with 63 percent of chief executives at South Korean companies also serving as chairmen. That figure is 24 percent among Indian companies and 15 percent among Chinese firms. Independence levels among the boards of South Korean firms – as measured by the presence of independent directors – average 56 percent, compared with 50 percent in India and 39 percent in China.
Related-party transactions with significant shareholders are most common in China, where 85 percent of firms adopt the practice. Only 29 percent of Indian companies and 19 percent of South Korean firms do so, according to the ISS data.
