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GMI Releases List of Risky Firms

GMI recently issued a list of 10 risky companies.

In light of recent scandals and other problems, corporate governance research firm GMI recently issued its Risk List, a report that aims to alert potential investors to some of the vulnerabilities and threats certain corporations carry.

Surprisingly, or perhaps not, News Corp and Discovery Communications were among the list of 10 high-risk companies who are poorly rated due to challenges in transparency regarding accounting struggles as well as environmental, social and governance (ESG) issues.

Openly reporting accounting procedures, sharing details about health and safety and environmental risks and policies, setting performance targets and creating an independent board were all goals that the listed companies struggled with.

"ESG risk factors impact long term company valuations and the cost of capital, and are being used by investors and others - including corporations - to complement traditional valuation models and company disclosures," stated the CEO of GMI, Jack Zwingli.

Reuters reports that the recently uncovered practice of phone hacking at News of the World dealt a major blow to News Corp, and that the company had failed to show it was doing much in terms of improving corporate governance, other than replacing some board members and having some managers resign.