The Corporate Library reported this week that Citigroup’s corporate board is the lowest rated among the 1,700 of the largest U.S. companies. The hit is the latest in a string of recent public relations disasters to befall the company.

In April, Citigroup Chairman and CEO Sanford Weill agreed to pay a $400 million settlement in response to charges that Citi and nine other investment banks had allegedly floated Pollyanna stock research to impress investment-banking clients.

After the embarrassing admission, Weill withdrew his nomination to the New York Stock Exchange Board of Directors. Then, earlier this month, security regulators requested to see e-mails from Weill and CEOs at 11 other Wall Street firms, checking for chatter about whether they knew that analyst research had been swayed by investment banking considerations.

"The business meltdowns of the last two years have proven that there is a category of 'governance risk' that investors want to understand more fully," said Ric Marshall, The Corporate Library's CEO. "But the post-Enron reforms have led to over-focus on compliance and structural indicators."

Nine other businesses received failing marks from The Corporate Library: In alphabetical order, they are:

• Allstate Corporation
• Emerson Electric Company
• Gemstar-TV Guide International
• Honeywell International, Inc.
• J.P. Morgan Chase & Co.
• Loews Corporation
• SBC Communications Inc.
• Verizon Communications Inc.
• Walt Disney Company

Some of these companies, including Disney, have received positive attention lately for their governance initiatives. Nell Minnow, editor at the Corporate Library, said actions speak louder than words when it comes to good governance.

"Investors should be less concerned what the governance policies say, or what I call 'resume independence' than they are with the practice of independent judgment," Minnow said. "We do not evaluate directors on what they say they do; we evaluate them on what they actually do. We grade them on how well they handle the toughest calls."

Corporate Library researchers blasted Weill for allegedly trading preschool admission for a more favorable analyst report on AT&T. The shareholder activist group also came down hard on the Citigroup CEO for not taking a bigger financial hit over the $400 million Wall Street settlement. According to the report, the fine was paid by Citi's current shareholders (and the shareholders of Citi's insurers), "not by any of the people responsible."

Marshall applauded Colgate-Palmolive CEO Reuben Mark for his "willingness to stand up to Weill and his other fellow directors at Citigroup over the issue of CEO succession planning—one of the most critical tasks facing any board."