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CSA Rapid Response Survey No. 16 — October 2004
How do you rate the rating agencies?
With corporate governance ratings very much in the spotlight, Chartered Secretaries Australia (CSA) is keen to determine how companies rate the rating agencies and the value of their offering.
1. Have you (as a listed Australian public company) found that external bodies/organisations are making assessments/ratings about your company's corporate governance?
If yes, which bodies are making the assessments?
RESPONSES:
2. Do you have any concerns with the assessments made or the method of making such assessments?
3. Do any of the external bodies/ organisations check the facts of their report with you prior to releasing their assessments/ ratings to the public/ subscribers?
If yes, do they check all facts
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most check facts
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some check facts 83%
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none check facts 17%
4. (a) Were you consulted on the facts of the report prior to its release?
If yes, was it
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in full 25%
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only briefly 75%
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not at all
4. (b) Would you like to be consulted prior to the release of the report?
5. Did you take any steps to correct any inaccuracies or misunderstandings?
6. In your experience, are the rating agencies prepared to correct their assessments and re-release if they have made factual errors or misunderstandings in their report?
7. Do you believe that any inaccuracies or misunderstandings contained in the report can be justified on the basis that the external body/ organisation is making an independent assessment?
8. Do you believe it is important for the external body/organisation reporting on your company's corporate governance to maintain commercial independence — i.e. not sell other services to your company?
9. Do you subscribe to receive the reports issued by the external body/ organisation?
9. (a) If you don’t subscribe, how do you know when an assessment has been distributed that affects your company and are you able to obtain a copy of it and respond to it. Could you please explain briefly?
RESPONSES:
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Hear about it from institutions that do subscribe.
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Some organisations provide a report, others do not unless you subscribe.
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Advised by the market. No, copy not available.
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You don’t know and need to rely on it being brought to your attention. This poses problems as these reports can affect the reputation of a company and as such the company should be offered the chance of explaining its position.
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By their contact or through independent sources.
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Generally by reference from a broker or institution.
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Usually provided by an external party.
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Possibly only know by press reports.
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Usually passed on by broker or subscriber who has concerns with inaccuracies.
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Surveys of ‘reporter’ businesses can seek company input if they wish to add credibility.
10. Do you believe that such reports provide useful information to subscribers or do you believe that it promotes too much box ticking approach to corporate governance to be useful?
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