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Nexus between governance & share value

The day is not far when the announcement of governance scores and movements on ESG indices trigger buy-sell decisions of investors

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Illustration: Ajay Mohanty

Cyril ShroffAmita Gupta Katragadda
CEOs are under constant pressure from internal and external stakeholders to improve share price performance. Typically this expectation translates into the management focusing on top-line growth, bottom-line accretion and other financial metrics such as return on capital and dividend distribution. A close look at the winds of change in investor priorities, however, shows that there is a growing nexus between corporate governance and share value. We believe CEOs and boards can, and must, strategically unlock this “governance premium” as an avenue to drive stock performance. 

This assertion is backed by OECD’s observation that investors do pay a higher premium for
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper

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First Published: Feb 28 2019 | 9:23 PM IST

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