"Governance risk" is one ofnumerous risks that investors need to be cognizant of before buying bank stocks. This assesses the system of rules, practices, and processes by which a company is managed and controlled. It's tracked by the shareholder advisory firm Institutional Shareholder Services' QuickScore 3.0, which looks at four categories of corporate governance to produce a combined score, ranking banks on a scale of 1 to 10 (with 1 being the best).
Data source: Institutional Shareholder Services, How QuickScore Works.
Continue Reading Below
The banks that fared the worst in ISS's latest assessment include JPMorgan Chase , Bank of America , BB&T , and M&T Bank , among others. Most of these banks did particularly poorly when it came to risk and audit practices, with JPMorgan Chase and Bank of America receiving the worst possible score in this regard, as well as executive compensation, with BB&T and M&T Bank coming in at the bottom of the heap on this measure.
Scroll through the brief slideshow below to learn where these four banks ranked relative to the other firms that made the ignominious cut -- a table with the complete breakdown is provided below the slideshow.
Data source: Institutional Shareholder Services.
The article 10 Big Banks With the Most "Governance Risk" originally appeared on Fool.com.
John Maxfield has no position in any stocks mentioned. The Motley Fool recommends Bank of America. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright 1995 - 2015 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.