Walied Soliman and Orestes Pasparakis, co-chairs of our Canadian
Special Situations Team, recently authored an opinion piece in the
National Post's FP Comment section on "good" corporate governance. They argue
that the emphasis Canadian companies place on good corporate
governance is being misconstrued as an end in itself. The focus of
the corporation is, or should be, long-term value creation for the
benefit of its shareholders. "Good corporate governance can
serve this primary purpose, but it should never supplant
it."
Walied and Orestes point to the fact that in this year's Globe and Mail Board Games rankings,
"companies with lower corporate governance scores outperformed
those with higher scores. The top 20 ranked companies had together
an average five-year return of 24.99%, while the middle 20 and
bottom 20 had average returns of 53.58% and 92.25%
respectively." So companies who are getting
"A's" in corporate governance may be doing so at the
expense of their
