Avoiding GRIdlock: Living with the New RiskMetrics Matrix

Last March, RiskMetrics Group, formerly Institutional Shareholder Services (ISS), launched Governance Risk Indicators" (GRId), its new governance-related risk evaluation program. GRId consists of a matrix of 65 to 95 weighted questions that define RiskMetrics' view of what constitutes good governance for public companies. GRId replaces RiskMetrics' Corporate Governance Quotient (CGQ), which is being phased out.

Methodology

GRId evaluates a company by comparing the company's governance practices to RiskMetrics-defined best practices for the country in which the company is located (unlike CGQ, which compared a company's governance practices to peer group practices). GRId's methodology is tied to RiskMetrics' benchmark proxy voting policies and is expected to be annually updated in conjunction with policy updates.