By James A. Kaplan Over the past year, GMI Ratings reached significant product-development milestones that have reinforced the firm’s leadership in environmental, social, governance (ESG) and forensic accounting research. The latest enhancements have made GMI Analyst, our flagship research platform, much more broadly relevant to all the market segments we serve. In particular, I’ll highlight [...]
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GMI Ratings ESG Coverage Expands to More than 6,000 Companies Worldwide
March 18, 2013 in Corporate Governance, Daily Viewpoint, ESG Ratings & Research
EBIX: A Forensic Analysis
February 22, 2013 in AGR, Corporate Governance, Daily Viewpoint, ESG Ratings & Research
Naveen Reddy, Director of Ratings On Thursday, Ebix’s shares declined by almost 27% after a previously unknown research firm Gotham City Research LLC posted a lengthy report on Seeking Alpha, pillorying the company for its related party transactions, accounting statements and tax strategies, among other things. The Gotham City website is as intriguing and opaque [...]
ESG and CSR: An Overdue Alignment
February 19, 2013 in Corporate Governance, Daily Viewpoint, ESG Ratings & Research
By James A. Kaplan Not that we needed more evidence, but several high-profile reports recently reinforced the relevance of ESG research not only for the financial community, but also for corporate decision-makers. Late last week, the UN-backed Principles for Responsible Investment (PRI) released the ‘Integrated Analysis’ report which shows that investors are integrating ESG factors [...]
Study: Less Turnover, Better Performance at Firms Well-Rated by GMI
February 8, 2013 in AGR, Corporate Governance, Daily Viewpoint, ESG Ratings & Research
By Kimberly Gladman, CFA, Ph.D., Director of Research and Risk Analytics GMI Ratings seeks to analyze board quality based on publicly available information—principally proxy disclosures about directors’ qualifications, biographies, and their relationships to the company and each other. But, skeptics often note, board discussions happen behind closed doors—can proxies really provide a window into their dynamics? [...]
Global Sustainable Investment: Spotlight on Africa
February 5, 2013 in AGR, Corporate Governance, Daily Viewpoint, ESG Ratings & Research
By Kimberly Gladman, CFA, Ph.D., Director of Research and Risk Analytics The recently-released review of global sustainable investment contains a fascinating section on Africa. Currently there are $228.7 billion in sustainable AUM on the continent, with the most commonly used strategy being the integration of environmental, social, and governance factors into standard investment analysis (“ESG integration” [...]
Apollo Group Continues Its Freefall Amidst Its Freefall
January 11, 2013 in AGR, Corporate Governance, Daily Viewpoint, ESG Ratings & Research
By Damion Rallis, Senior Research Associate On Tuesday, embattled not-for-profit education company Apollo Group Inc. (NASD:APOL) revealed a new set of bleak numbers in its financial results for the first quarter of fiscal 2013, including a decline of 11.7% in operating income from the prior-year first quarter and a decline of 14.3% over the same [...]
Blyth’s Blight Continues to Dismay Shareholders
January 11, 2013 in AGR, Corporate Governance, Daily Viewpoint, ESG Ratings & Research, Ratings Watch
By Damion Rallis, Senior Research Associate While the bulk of ongoing media scrutiny of multi-level marketing firms focuses on Herbalife and its battle with hedge-fund manager Bill Ackman (see our report “Herbalife: With Vital Signs Flagging, the Company is Fighting Back”), other firms engaged in similar marketing practices should also start working on their rebuttals. [...]
Monsanto: The Contrarian View
January 9, 2013 in AGR, Corporate Governance, Daily Viewpoint, ESG Ratings & Research
By Lev Janashvili Against the backdrop of Monsanto’s rising share price and an impressive earnings report, the FT’s “Lex” team yesterday delivered a contrarian view of the agricultural giant’s growth prospects and valuation. The brief report (Monsanto: lords of the harvest?) acknowledged Monsanto’s growth catalysts (e.g., strong demand for corn seeds in the US, strong [...]
Faith-Based Audits Prevail at One in Six US Firms
January 7, 2013 in AGR, Corporate Governance, Daily Viewpoint, ESG Ratings & Research
By Kimberly Gladman Buried deep in the Wall Street Journal one day last month was a small but stunning article I thought worthy of the front page. The Public Company Accounting Oversight Board (PCAOB), the article reported, had stated that “the eight biggest accounting firms failed in 22% of the audits it reviewed last year [...]
Event Alerts for Responsible Investors, 01.04.2013
January 4, 2013 in AGR, Corporate Governance, Daily Viewpoint, ESG Ratings & Research
In this week’s Event Alerts for Responsible Investors, we included 29 companies whose ESG and accounting risk profiles have been affected by recent events. Environmental Social Governance Accounting Royal Dutch Shell Plc (AMS: RDSA)Exelon Corporation (NYSE: EXC)Chevron Corporation (NYSE: CVX) Stryker (NYSE: SYK)Chevron Corporation (NYSE: CVX)Toyota Motors (NYSE: TM)Telstra Corporation (ASX: TLS)Singapore Airlines (SIN: C6L)Eli [...]
Recommended Reading on Forensic Accounting
January 3, 2013 in AGR, Corporate Governance, Daily Viewpoint, ESG Ratings & Research
By Lev Janashvili Last year, GMI Ratings published several research reports and opinion pieces (see below) reminding our readers that aggressive accounting remains a widespread practice at public companies. We also argued that investors need to incorporate forensic accounting, along with ESG research, into their day-to-day decisions about stock selection and, importantly, stock rejection. In [...]
Your Bank’s 10-K: Clear as Mud, And Dangerous
January 3, 2013 in AGR, Corporate Governance, Daily Viewpoint, ESG Ratings & Research
By Kimberly Gladman, CFA, Ph.D., Director of Research and Risk Analytics In an excellent article recently published in The Atlantic, University of San Diego law professor Frank Partnoy and ProPublica reporter Jesse Eisinger offer an incisive, lucid, and engagingly written critique of banks’ financial reporting. Using the example of Wells Fargo’s lengthy annual report, the authors [...]
Biweekly View: Petrobras Grapples With Oil Spill Prevention
January 3, 2013 in Corporate Governance, Daily Viewpoint, ESG Ratings & Research, Ratings Watch
By Sonja Ryst, Financial Reporter Alexandre Anderson de Souza, president of the Brazilian fishermen’s organization Associação Homens e Mulheres do Mar (AHOMAR), has been waging a war against Petroleo Brasileiro SA (PBR.) When the company also known as Petrobras failed to prevent the rupture of an underwater pipeline to its refinery in January 2000, oil [...]
Herbalife: With Vital Signs Flagging, the Company is Fighting Back
December 27, 2012 in AGR, Corporate Governance, Daily Viewpoint, ESG Ratings & Research, Research Reports - GMI
By Lev Janashvili Herbalife’s battle with its detractors is heating up. The consumer products company (NYSE: HLF) has lost about 60% of its market value since April of 2012. Short interest in the stock, a gauge of investor pessimism, has increased by more than 500% over the past year. The latest data from ThomsonOne, published [...]
GMI Ratings’ Investor Alert 12.18.12
December 18, 2012 in AGR, Corporate Governance, Daily Viewpoint, ESG Ratings & Research, Investor Alert
Recent events have significantly affected the ESG risk profiles of the following companies: Environmental Chevron: On December 15, 2012 Chevron agreed to pay 310 million reales ($155 million) to Brazil for an oil spill last year that fouled beaches in Rio de Janeiro. The November 2011 spill saw some 3,000 barrels of crude soil the [...]
GMI Ratings Study Finds that Major Market Indices Expose Investors to Elevated ESG and Accounting Risk
December 11, 2012 in AGR, Corporate Governance, Daily Viewpoint, ESG Ratings & Research, GMI Press Releases
New York – December 11, 2012 — GMI Ratings, the leading provider of research on environmental, social, governance (ESG) and accounting-related risks affecting the performance of public companies, released today the results of a study assessing the risk characteristics of major market indices based on ESG and forensic accounting criteria. Focusing on Nasdaq 100, S&P [...]
IN MY OPINION | DaVita Healthcare Partners
December 4, 2012 in AGR, Corporate Governance, Daily Viewpoint, ESG Ratings & Research
By James A. Kaplan, Vice Chair and Chief Executive Less than two weeks ago, GMI Ratings placed DaVita Healthcare Partners (NYSE: DVA) on the Black Swan Risk List (BSRL) of North American companies with the most aggressive accounting practices and the highest risk of a major drop in share price. GMI Ratings’ forensic accounting model [...]
GMI Ratings Launches Global LeaderBoard
December 4, 2012 in Board Diversity, Boards, Corporate Governance, Daily Viewpoint, ESG Ratings & Research, GMI Press Releases
Relationship-mapping Tool Deepens Analysis of Corporate Governance and Extra-financial Issuer Risk New York – December 4, 2012 — GMI Ratings, the leading provider of research on environmental, social, governance (ESG) and accounting-related risks affecting the performance of public companies, announced today the launch of Global LeaderBoard (GLB), an online research and data-visualization tool that maps [...]
Global LeaderBoard: Why Should We Care?
December 4, 2012 in Board Diversity, Boards, Corporate Governance, Daily Viewpoint, ESG Ratings & Research
By Paul Hodgson – Chief Research Analyst Global LeaderBoard (GLB) is an online research and data-visualization tool designed to deepen the analysis of corporate governance practices that can materially affect issuer risk. GLB maps complex relationship patterns at the individual, organizational, industry and regional levels. Among many other insights, GLB allows subscribers to identify corporate [...]
3D Systems Corporation: Doth They Protest Too Much?
November 28, 2012 in AGR, Corporate Governance, Daily Viewpoint, ESG Ratings & Research, Ratings Watch
By Damion Rallis, Senior Research Associate While the share price at 3D Systems Corporation (NYSE:DDD) continues its steady and impressive climb—up more than 200% since last November—a closer look at the company’s governance profile reveals several troubling indications that 3D Systems could be due for a reversal. Not only has the 3-D printing company been [...]