Structured Solutions and GMI unveils new indices

The New York based corporate governance research and ratings agency, GovernanceMetrics International (GMI) together with Structured Solutions AG, an index provider which is headquarter in Frankfurt announced yesterday that they are in the process of developing the first stock trading indices based on GMI's governance ratings.

While the first index, the Solactive GMI Germany Performance Index was recently released, the second will be available in the forthcoming weeks, according to GMI. All Solactive GMI indices will be arranged on a quarterly basis using updated GMI ratings. Also, the indices will incorporate a new approach that includes information from top companies within a predefined stock pool.

Recent independent studies suggest that companies with tighter corporate governance practices are able to achieve higher and more stable returns in the markets. Over the years, many developed countries have put into place corporate  governance codes, principles and rules to promote accountability, responsibility and sustainable business practices, the agency said in a statement.

'An investment in the newly-developed corporate governance indices offers an uncomplicated way to participate in the development of well governed corporations,' says Richard Bennett, president and chief executive officer of GMI.
 
In the future, GMI anticipates that the demand for environmental and social governance will increase and the new merger of indices will provide institutional investors with neutrally-calculated and updated ratings.