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Governance for stakeholders, not shareholders

In the recent excitement over the rapid development of Environmental and Social metrics, the ‘Governance’ part of the ESG commitments that many firms lay claim to has been overshadowed. That is now addressed by the third annual Governance report from the UK Institute of Directors (IOD), which has evaluated public companies according to factors like audit practices, whistleblowing policies and directors’ pay. The top 10 are listed below. We will spare the blushes of the lowest ranked – go to to see the full ranking and methodology.

Perhaps more interesting than the sometimes contested rankings were comments on evolving practices in Corporate Governance. The latest IOD measures, for example, include whether a company is a signatory of the UN Global Compact, which, like the Principles for Responsible Investment, leans towards demonstrating continuous improvement. The IOD wants to steer away from a purely compliance approach ‘that has become widespread in recent years’ and start taking more account of ‘the quality of corporate governance as perceived by stakeholders…’

That is stakeholders, not shareholders. A far wider and more complex responsibility.

The 10 best companies for corporate governance (IOD 2017)

Rank Company

1 Diageo

2 Aviva


4 Barclays

5 Smiths Group

6= Prudential

6= RSA Insurance


9= InterContinental Hotels

9= Compass

Fortuna AMC has specialist expertise in assessing Environmental, Social and Governance (ESG) issues affecting investors, and how to address and communicate the risks and opportunities they present. If you would like to know more, please contact

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