The Good Guys Finish First

Institutional Investor has announced its picks for best U.S. companies for investor relations, and a new study shows that good governance pays dividends.


Advertisement


All Aboard the High-Velocity 2006 FRx Express! FRx Software has the engine fired up again to travel nationwide with timely training and expert guidance! Microsoft FRx and Microsoft Forecaster users, potential users and resellers don’t miss this FREE*, half-day event!

Once you’re on board, the FRx Software experts will help you gain tremendous insight into Microsoft FRx and Microsoft Forecaster. You’ll have the opportunity to hear customer perspectives and network with prospects plus pack in useful tips, and see the features and benefits of FRx Software’s financial analytic applications. Register now!


FRx Software Home Product Information
Training & Consulting Product Demo
Webcast Customer Testimonial Video



More than 1,000 analysts and portfolio managers, on both the buy and sell sides, nominated companies across 41 industry sectors for the Institutional Investor survey. Investors said that transparency and quality of financial disclosures were the most important factors in determining the effectiveness of investor relations communications. Also important are the credibility, integrity and candor of the Investor Relations team, followed by access to senior management, the magazine said.

Comments from those investors back academic studies that show that investors can profit if they buy stocks of companies with good governance practices. That means an independent board, pristine accounting, executive compensation that matches performance and few antitakeover rules, the Wall Street Journal reported.

A study by Georgia State, and data compiled by the Corporate Library, found higher returns for stocks of well-governed companies, compared with the overall market.

In the Institutional Investor survey, PepsiCo ranked first in investor relations on the buy side in the beverages sector. The Journal called the company a “poster child for good governance” because of its strong management and straight talk. It also offers employees flexible, comprehensive benefits and promotes diversity in its work force.

“It's the harmonic convergence of everything you'd want as an investor," says Herb Achey, senior consumer-goods analyst for U.S. Trust.

Richfield, Minn.-based Best Buy Co. Inc. topped the rankings on both the buy and sell sides in the retailing/hardlines sector. Also, Procter & Gamble Co., with its headquarters in Cincinnati, was listed tops in the cosmetics, household and personal care products sector, on both the buy and sell sides. Colgate-Palmolive ranked two and three on the buy and sell sides, respectively.

The Journal noted that Colgate-Palmolive Chief Executive Reuben Mark refused to throw his hat in the ring for re-election to the board in 2003 because he opposed the company's murky succession plans, a move that won him the respect of good-governance watchdogs. The company is committed to transparency and openness, and analysts expect long-term earnings growth of 10 percent to 12 percent.

Other companies that ranked No. 1 on both the buy and sell sides: In the large-cap banks sector, it was Wachovia Corp. The Goldman Sachs Group Inc. ranked first in the brokers and asset managers sector. Accenture topped the computer services and IT consulting sector. Cisco Systems ranked first in the communications equipment sector, and Eli Lilly was tops in pharmaceuticals.

The full list can be found at www.institutionalinvestor.com.

You may like these other stories...

We've all been there. Trying to make our work-lives more efficient, transfer knowledge to newer team members, and leverage our practices. Sometimes it works, and sometimes, well, the result is embarrassing at best.Here...
From May 20-23, the Association for Accounting Marketing (AAM) held its annual conference. Frequent contributor Sally Glick picked up some ideas that she will be sharing with us in the coming days, as she has done in...
Success, for a practitioner in a busy CPA firm, requires the ability to handle multiple tasks effectively. To get everything done, CPAs typically track their agenda with a "to do" list or other open-item systems to...

Upcoming CPE Webinars

Jul 24
In this presentation Excel expert David Ringstrom, CPA revisits the Excel feature you should be using, but probably aren't. The Table feature offers the ability to both boost the integrity of your spreadsheets, but reduce maintenance as well.
Jul 31
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.