Thank heavens for Senators Sarbanes and Oxley. Without the law they sponsored, the US economy would likely have suffered a much bigger slump over the past two years. That’s because hardly a day passes without new (or old) programs and platforms being sold to help companies to comply with the law.
The Corporate Library, an independent investment research firm providing corporate governance data, is the latest. The company IdealWork Financial says that its financial services application, IWF Advisor, will buy corporate governance data from the Portland, ME based company, which was founded in 1999.
IdealsWork Financial describes itself as a company that “develops software that allows investment advisors to build trust with clients by enabling rapid, custom tailored research and rankings on a wide range of personal standards, sustainability and risk factors.”
IWF Advisor, according to IdealWork, blends research on sustainability, risk, financial performance, and a wide array of corporate practices to screen and rate investments according to client guidelines or portfolio standards. In addition to The Corporate Library, IWF Advisor also uses databases from Morningstar and the Investor Responsibility Research Center.
“Poor governance results in poor financial performance, and investors are rightly concerned with the impact of corporate malfeasance on their stock holdings,” says Sam Pierce, CEO of IdealsWork Financial. “We are pleased to include The Corporate Library’s outstanding analysis in IWF Advisor as it will help investors avoid companies that don’t match their financial or personal expectations.”
Investor interest in corporate governance issues has risen significantly, in part due to high-profile news coverage of Enron and Tyco, as well as from pressure from the new law, passed in 2002. According to a 2003 study conducted by Russell Reynolds Assoc., 71 per cent of investors feel that corporate governance practices are a very important consideration when making investment decisions, a marked rise from its 2000 study’s finding of 53 per cent.
“Corporate governance practices directly impact shareholder value, and it is crucial for all financial advisors to introduce this subject to their clients, and to inform them of the potential liabilities,” says Karen Lowell, CEO, of The Corporate Library. “We are excited that IWF Advisor will make our data accessible to a broad and increasing base of financial advisors and their clients.”
IWF Advisor is a “powerful financial services application that enables financial advisors to quickly identify the investments that best meet their clients’ financial performance and ethical standards”, the company trumpets itself. It is the first tool to evaluate both social and financial performance to help advisors create multidimensional, individualized investment portfolios for their clients, it claims.