| Headline: New rules of good behaviour - CLSA Methodology Source: Euromoney Date: September 2001 CLSA rated the companies under its core coverage for corporate governance (CG) according to its score on a questionnaire filled up by our analysts. The questionnaire is designed such that all questions have strictly binary answers (yes/no) to reduce analyst subjectivity. It assessed the companies on 57 main issues divided into seven key criteria that we take to constitute the concept of good CG: (1) management discipline, (2) transparency, (3) independence, (4) accountability, (5) responsibility, (6) fairness, and (7) social responsibility. The first six criteria were given an equal weight of 15% and the last, social responsibility, was given a lower weight of 10%, reflecting differing views on whether this is really part of the core concept of corporate governance. Each question in each section has an equal weight except for the key questions under the independence and fairness sections which together had a 15% weight in the total score (half weight within their sections). The two questions with higher weight were (i) whether there had been any controversy over any decisions by the board or senior management that appeared to favour them over shareholders; and (ii) whether any decision by senior management have been perceived to favour majority shareholders over minorities. |