May 2007
Beginner
52 pages
49m
English
Good governance only makes sense if it makes sense. As long ago as 1996, McKinsey and Company found that two-thirds of the companies in a survey would pay an 11% premium for the stock of a company with good governance practices. 17
More than that, ‘companies whose boards engage in one or more of [the] three governance practices that signal board independence from management outperform their peers and produce higher returns for their shareholders’, 18 as measured by economic value added (EVA – earnings (post-tax) in excess of the cost of the capital required to generate them).
And if good governance makes sense, good IT governance makes even more sense:
‘[T]op-performing firms succeed where ...
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