Seems like brokers have discovered corporate governance.

Companies with solid corporate governance deliver superior returns to investors, according to a Goldman Sachs JB Were report.

The research relates to research conducted on Australian companies but the findings send a signal to other markets.

The study found that companies with solid corporate governance generated returns 10.9 per cent above the market. The ones with good board skills provided 10.9 per cent better returns.
Returns from those with solid boards were 10 per cent above and those with good remuneration policies and practices had returns that were 7.1 per cent up on the market.

What's more, better corporate governance ensured that unpleasant earnings surprises were less likely.

"Companies with higher-quality reported information . . . are less likely to suffer accounting or reporting errors that require subsequent typically negative revision," the report said.

"Well-governed companies understand the need, and have the ability, to communicate and manage market expectations and therefore likely to provide more reliable earnings outcomes relative to expectations."