Ratings of Corporate Governance

Credit-Rating has developed a methodology for assessing corporate governance. This shows the importance of development of corporate governance fundamentals in Ukraine as well as providing market participants with reliable information with regard to the implementation and utilization of companies` corporate governance.

To develop a methodology of corporate governance assessment (hereinafter referred to as `methodology`) the agency assumed as basis the following documents: the OECD Corporate Governance Principles, Euroshareholders Corporate Governance Guidelines 2000, EASD Corporate Governance Principles and Recommendations, Corporate Governance and Transparency Policy in Emerging Markets by IMF, Global Principles for Corporate Governance by CalPERS, Principles for Corporate Governance approved by the Ukrainian Commission for Securities and Stock Market, Code of Conduct Fundamentals for Credit Rating Agencies approved by IOSCO Technical Committee.

Corporate Governance is a relationship between the company`s stockholders, its managers, and other parties concerned to ensure the company`s efficient performance and balance in influence and interests of all persons concerned.     

The assessment of a company`s corporate governance is conducted to ascertain a company`s compliance with commonly-accepted principles underlying in efficient corporate governance, which may be exercised in a wide range of legal, economic and political issues. The final result is the corporate governance rating, which is assigned to the company assessed in accordance with the National Scale for Corporate Governance Ratings by the agency`s Rating Committee as voted.

Corporate Governance Rating is an independent rating agency`s opinion with regard to the existing company`s corporate governance system, its compliance with the interests of financially interested parties, primarily of its owners. The corporate governance rating allows for differentiation of companies in accordance with their corporate governance quality.

The methodology for qualifying a rating is based upon the following primary fundamentals : the quality and sincerity of the rating process; the rating agency`s independence and prevention of conflicts of interest; and the rating agency`s responsibility to investors and issuers.

The assessment of corporate governance is carried out by studying certain segments of corporate governance system considered by the rating agency in the course of the rating process, namely the company`s ownership structure, rights of the owners and of other parties concerned, management and control procedures, disclosure policy and audits.

The assessment of corporate governance is based upon information provided by the company rated, as well as upon other information the agency has at its disposal and is deemed reliable. The rating agency does not conduct audits, neither the independent assessment of information with regard to the qualifying of a rating.

Corporate governance rating may vary from 'A' (the highest rating) to 'E' (the lowest rating). Ratings of 'B', 'C' and 'D' may have intermediate categories (modified by '+' or '-')  

The Outlook for a corporate governance rating (Positive, Stable, Negative and Developing) indicates further development trends (possible but not compulsory).

Corporate governance rating always has ua modifier (stands for the Ukrainian National Credit Rating Scale) and RCG modifier (stands for the Corporate Governance Rating).

Corporate Governance Rating Scale

Credit Rating Outlooks

The first corporate governance rating of RCGuaB was assigned to Parex Asset Management Ukraine Asset Management Company and Pension Fund Administrator.

For further information, please contact:
Olga Shubina, Natalya Bakumenko +38 044 490-25-50