The CGRS is aiming at full publication of its rating methodology, governance structures, and – crucially – the rating results and reports for qualifying companies, as well as all data related to the ratings. For this purpose, a dedicated website has been launched at

After the first round of full company ratings is published, each company will have a dashboard, from which access can be gained to the three different rating components, reports as well as documents supporting the ratings. Such a degree and ease of disclosure will put the CGRS ahead of all its peers in the field. It will also go a long way in securing the necessary trust in the rating methodology and process.


CG indices need a credible monitoring and supervision setup and governance structure to effectively mitigate reputational risk.  Reputational risk can stem   from   both   an inadequate supervision setup   and   one constituent’s corporate scandal, which can easily damage the reputation of all companies in the index.

A CG Index must be monitored for two distinct reasons: First, the index composition must follow the technical composition guidelines of the stock exchange. Second, compliance with governance criteria must be monitored. Also important is a credible procedure for the immediate exclusion of companies that gravely violate index criteria.


Other than the listing segment in Brazil, where compliance is monitored continuously, formal evaluations take place annually. Regular exclusion occurs during the annual reviews if companies fail to qualify.  All indices – with the exception of Peru – have procedures in place for the extra-ordinary exclusion of companies found guilty of a grave violation of governance criteria. Such exclusions can take place at any time.  In practice, the only such exclusion witnessed to date occurred in the Chinese Index.  The most common exclusions are for mergers and acquisitions, bankruptcies and failing to meet market-based criteria such as free float, liquidity and market cap.


None of the existing indices have particularly elaborate governance structures. In essence, most structures merely secure that the stock exchanges are not directly involved in the ratings process. With respect to governing bodies, only South Africa discloses information on the existence of such bodies. The South African JSE SRI Index has an Advisory Committee, which is appointed by the JSE, but operates independently of the stock exchange. The Committee is responsible for reviewing the selection methodology for constituent companies, oversees the annual review process and advises the JSE on process issues, dealing controversies and borderline issues. However, the final decision on which companies are included in the Index rests with the JSE.


The CGRS Steering Board (SB): The SB is the governing body of the CGRS, defining its scope, guiding its development and its ultimate authority.
The SB will be composed of seven members, mainly representing the CBI, NSE, but also regulatory agencies, civil society and a private sector representative. The SB member term length is three years.

The Selection Committee (SC): The SC’s responsibility is to create a long list of qualified   consultants and companies, for possible membership of the EMSG and to serve as consultants for the stakeholder assessments and verification of company self-assessments. The SC will be composed of five members, including a representative from CBI/NSE, business associations and someone with investigative/due diligence skills. SC member term length is two years.

The Ratings Committee (RC): The RC will be responsible for coordinating the different aspects of the ratings process. It also assigns the consultants to conduct the stakeholder interviews and the members of the EMSGs from the long list produced by the SC. The consultant assignment process includes conflict of interest checks.  Given the importance of the Component 3 Corporate Integrity in the CGRS, it seems appropriate from our view to have a dedicated committee selecting the   individuals   taking   crucial   positions in the implementation of Component 3.
The RC will be composed of five members, including a representative from the CBI, but importantly not from the NSE, thus distancing the NSE from the actual ratings process. RC member term length is two years.

The Rules Committee (RuC): The RuC’s role is to supervise the quality and integrity of the ratings process as a whole including auditing the process and ensuring that quality control mechanisms are in place and implemented. As such it is specifically entitled to act on violations and rumours of violations of the CGRS governance criteria in ranked companies by recommending appropriate actions. It thus serves the very important role of protecting the CGRS from potential reputational damage stemming from a corporate scandal (or, ideally, detecting the early stages of the development of such a scandal). The RuC also selects the consultants to verify company self-assessments.
The RuC will be composed of five members, one each from CBI and NSE, a legal expert from civil society, a representative from the rated companies and an independent public relations expert.  RuC member term length is two years.
Each of the committees has an important role in the overall CGRS process without apparent overlap. The SC is important due to the number of evaluators involved in the three-component rating methodology and the RuC to mitigate the potential risk from corporate scandals and rumours. There is a strong focus on protecting the reputational integrity of the rating system, which is always important, but particularly so in the case of Nigeria.

Independent International Observers: To further increase the transparency and accountability of the CGRS, two international experts in the field of corporate integrity and corporate governance will serve as independent observers of the process   and implementation of the rating system taking over from the Humboldt-Viadrina School of Governance that were the Independent International Observers during the design and pilot phase.  For the first term the observers nominated are:

  • Jermyn Brooks: Jermyn is a board member of Transparency International. In 1962 he joined Price Waterhouse, leaving in 2000 as Global Managing Partner after leadership roles in many countries. He was a founding Board Member of the World Economic Forum’s Partnering Against Corruption Initiative, and has frequently chaired the 10th Principle Working Group of the UN Global Compact. He also served as a member of the Wolfsberg Group, which developed the Wolfsberg Anti-Money Laundering Principles. Brooks chaired the Steering Committee of the Business Principles for Countering Bribery from 2002-2010, and the Audit and Finance Committee of the Centre for Humanitarian Dialogue, whose board he was appointed to in 2012.
  • Andreas Grimminger: Andreas is the Founder and Managing Director of PGS Advisors International, a boutique advisory firm on policy, governance and sustainability. He has worked with the IFC, World Bank and OECD on corporate governance and policy issues in Latin America, Asia and around the globe and with private clients on improving governance and sustainability structures.  He has   published extensively on corporate governance rating systems. Previously, he was Head of Research at the Financial Standards Foundation where public information on compliance with 12 Key Financial Standards such as the OECD’s Principles of Corporate Governance was utilized to produce ratings and comprehensive profiles for 93 countries. Andreas is a regular participant and presenter in the OECD’s Corporate Governance Roundtables in Asia and Latin America.