Risk is a key factor in any financial transaction, but investing in stocks may be among the riskiest. The success of a company is about more than financial performance, and shortcomings in other areas can put the company — and its shareholders — at risk.
GovernanceMetrics International, a leader in corporate governance research, has introduced a list highlighting 10 companies and risk issues that "are critical for investors and other corporate stakeholders to monitor and respond to."
The debut "Risk List" identifies what GMI considers "key indicators that are often more reliable predictors of investment risk than traditional approaches." They are: issues about board of director independence; executive compensation policies and practices; ownership structure; environmental, health and social issues; and balance sheet practices such as revenue recognition, leverage and accounting mechanics.
GMI's list, based on proprietary data and tools, does not address stock performance nor recommends any action by investors. Click ahead to see, in alphabetical order, the 10 North American companies on the list.
By Albert Bozzo
Posted 13 October 2011