While many of us investors worry about the soundness of the corporate governance of the companies in which we're invested, there's an organization out there dedicated to tracking and evaluating such things. Meet The Corporate Library (www.thecorporatelibrary.com), founded in 1999 by Nell Minow and Robert A.G. Monks. Among other things, it serves up Board Effectiveness Ratings, assigning grades of A through F to public companies.

It introduces the ratings by noting that, "Weak, ineffective corporate governance with poor oversight by under-informed, under-focused, or under-competent boards has cost investors hundreds of billions of dollars over the past three years. Shareholders are increasingly aware of governance risk. According to studies by McKinsey & Co., institutional investors are willing to pay up to a 12-14% premium for well governed companies in North America and Western Europe. . We want to know which boards are most likely to enhance and preserve shareholder value, and which boards might actually increase investor risk."

That said, here are some companies on The Corporate Library's halls of fame and shame for 2003:

  • On the list of the 10 worst large U.S. boards is Allstate (NYSE:ALL), cited for, among other things, "a board dominated by past and present CEOs and directors who already sit on too many other boards."

  • "Worst overall" was Citigroup (NYSE:C), which was slapped with a sizable fine related to the scandal where big cheese Sandy Weill helped get an analyst's kids into a desirable preschool in exchange for a favorable report on AT&T (NYSE:T). "Weill and the board have demonstrated no personal accountability. The fine was paid by Citi's current shareholders (and the shareholders of Citi's insurers), not by any of the people responsible."

  • Honeywell International (NYSE:HON) made the 10 worst list, as well. The Corporate Library asks:

"Should former CEOs chair compensation committees? We don't think so: CEOs seem to have a hard time saying no to one another. . former CEO Lawrence Bossidy is entitled to an annual retirement benefit of $3,937,966, and for the remainder of his life, Mr. Bossidy will be entitled to access to or use of Honeywell facilities and services comparable to those provided to him prior to his retirement. ... Incoming CEO David Cote's agreement includes a golden hello worth around $59.5 million, including the grant date value of the more than 2 million stock options he received. None of this, of course, is tied to performance. In the meantime, the full Honeywell board continues to refuse -- for three years running -- to act on shareholder proposals that have received majority support, including the declassification of board elections."

  • Target (NYSE:TGT) was cited for refusing to take shareholder questions at its annual meeting.

  • Some firms earning kudos include Fannie Mae (NYSE:FNM), Hershey Foods (NYSE:HSY), and AMR Corp. (NYSE:AMR).

Foolish belled caps should be tipped to The Corporate Library for acting as a watchdog on investors' behalf. Stay tuned for further updates on this organization's work.

If you're looking for some promising stocks, check out our suite of stock newsletters. They offer recommendations each month, focusing on smaller companies and those that pay hefty dividends, among other attributes.

Longtime Fool contributor Selena Maranjian does not own shares of any companies mentioned in this article.