The expert magazine of Ostrum AM

« Guess what ? It does ! », answers Sanda Molotcov, Head of Credit Research at Ostrum Asset Management.

The Renault case which hit the headlines this week is a strong reminder that governance plays a crucial role in assessing a company future risk profile. It’s been our experience that governance may have either neutral, or negative impact on a company credit profile, because governance may simply induce management/board  behaviour, which in its turn may have a huge impact on a company risk taking discipline, its oversight, over its decision-making process,its effectiveness and rationale thereof.

In our universe, a third of the companies we deem as unsuitable for bond investment are so for governance reasons.

Sanda Molotcov

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