Companies to Create Governance Benchmarks

February 26, 2004 ( - Index provider FTSE Group is teaming with Institutional Shareholder Services (ISS) to create a set of global corporate governance indices.

According to a news release, FTSE and ISS have identified a set of globally accepted corporate governance principles, which will be applied to rate over 7,000 companies within the FTSE Global Equity Index Series. The announcement said the ratings will better allow investors to compare the companies within global portfolios using a single, integrated index.

The product, which will be launched in phases beginning in Summer 2004, has been developed in response to the concern among institutional investors about the management of risks associated with poor corporate governance when investing in global equities. The first set of products will cover the developed markets within FTSE Global Equity Index Series and the FTSE All-Share index.

“Investors will now have the option of deciding how to manage corporate governance risks within their benchmarks.   The FTSE/ISS corporate governance co-operation will allow investors to assess their risks and to adjust their benchmark, choosing either to adopt the standard FTSE/ISS model or by using a customized benchmark from FTSE,” said Mark Makepeace, FTSE Group chief executive.