GLOBAL – FTSE Group and Institutional Shareholder Services have added corporate governance ratings to their new FTSE ISS Corporate Governance Index.

The ratings, which cover over 2,200 companies from 24 countries are based on five themes of corporate governance. They ratings are part of the index which aims to help asset managers assess and manage portfolio risk. The series contains six regional indexes.

The two firms said: “There are strong country and size biases to good corporate governance practices amongst companies, which are less evident across industry sectors.”

Highly ranked firms in the UK include: BHP Billiton, Smith and Nephew, Scottish Power, BT Group and BPB. Eurozone performers included: BNP Paribas, Irish Life & Permanent, Lafarge, Cap Gemini and Numico.

They said: “There is a high correlation between FTSE ISS CGI Series and its underlying FTSE benchmarks. Investors currently perceive corporate governance as an important risk factor.”

In a joint statement Mark Makepeace and John Connolly, the chief executives of the two firms, said: "It's now understood that corporate governance failure leads to loss of shareholder value, but until now, quantifying the risk represented by corporate governance practice has posed a challenge for investors.”

FTSE and ISS launched the first phase of the index last December.