Can governance be marked out of 10?

Unfortunately the decision that governance is bad only seems to occur after a scandal, but good governance should prevent scandals from occurring in the first place.  Do you think good governance can or should be measured periodically, as part of an organisational health check? What are the right metrics? What are the advantages and disadvantages of publishing the results? 

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  • Governance is already graded, if not out of 10 then at least on the familiar alpha-numeric rating system, by the ratings agencies. Greater transparency over the individual elements contributing to a rating has been one of the outcomes of the financial crisis and governance is included in the basket of factors that determine each corporate rating. At the extremes good or poor governance practices could move the dial on ratings and as result have real implications for cost of debt. Of course, assessing governance is subjective and difficult decisions need to be made about the evidence used to base such assessments on, but greater transparency - and comparable measures - in company accounts can help with this.