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. Last Updated: 07/27/2016

U.S. Tops Governance Survey

NEW YORK -- The United States is far from perfect when it comes to corporate governance. Just ask investors burned by scandals at WorldCom Inc., Enron Corp. and Adelphia Communications Corp.

But U.S. companies still do better than most in everything from board disclosure and accountability to shareholder rights, according to a study of 1,600 companies released Monday by governance ratings agency GovernanceMetrics International.

Conducted over the last five months, the study found that just 1 percent of the companies researched received a perfect score based on more than 600 data points and seven broad categories. The companies were rated relative to one another.

Yet, for shareholders and employees who lost their savings to the rash of U.S. accounting scandals over the last two years, the study holds some surprises. For instance, 15 of the 17 companies that received the highest possible ranking are based in the United States. Among the top scorers are some of the oldest, best-known and largest U.S. corporations: Exxon Mobil, Eastman Kodak, McDonald's, Allstate, PepsiCo and Colgate-Palmolive scored a perfect 10 in the ratings.

That does not, however, mean those stocks are sure bets, said Gavin Anderson, chief executive of New York-based GMI. "What we're saying is that from a governance point of view, these companies have very little risk."

He does say, however, that results could have been far different if the study had been conducted before some of the scandals became public.

"It would have been interesting to see how U.S. companies would have done if we'd done this a year ago. As a matter of fact, the conventional wisdom was that governance was best in the U.K."

Canadian companies, in fact, took the crown for the highest overall average score, followed by the United Kingdom and the United States. Companies based in 15 different countries were included in the study. Japan ranked at the bottom, with 10 of its companies receiving the lowest score for corporate governance. France, Switzerland and Spain rounded out the bottom of the rankings.