In the wake of the scandals that ruined investors in Enron and WorldCom, and the options backdating fiasco, "corporate governance" became the watch-phrase of the new millennium and a whole cottage industry of rating management was born.

Some evidence supports the notion that those with stronger governance have lower risk, increased profitability, and higher valuations. Companies with poor corporate governance could thus be targeted by shareholder activists, hedge funds, or short-sellers. In short, they could be ripe for a fall.

Below, we look at stocks that are marked to underperform the market by investors on Motley Fool CAPS, but sport above-average Corporate Governance Quotients (CGQs). Developed by proxy service Institutional Shareholder Services, a company's CGQ measures how well it performs in up to 63 categories covering four broad areas. Moreover, each company is scored relative to its market index and to its industry group.

Here are the five that I'm highlighting today:

Company

CAPS Rating
(5 max)

Index CGQ

Industry CGQ

Fannie Mae (NYSE:FNM)

**

95.4%

95.9%

Goodyear (NYSE:GT)

**

75.6%

98.6%

Hartford Financial (NYSE:HIG)

**

66%

89.5%

Sirius XM Radio (NASDAQ:SIRI)

**

67%

74%

St. Joe (NYSE:JOE)

*

99.3%

97.1%

 Source: Yahoo! Finance, Motley Fool CAPS.

Although there are many factors that an investor should consider before buying a stock, how well it treats shareholders shouldn't be least among them. View these rankings as a way to gauge how these businesses stack up against one another relative to their shareholder policies.

Mixed signals
It's tempting to think that FCC head Kevin Martin had it in for satellite radio from the beginning. That would explain why the agency took a year and a half to approve a merger, even though it was obvious to almost everyone but the regulators that it was necessary for Sirius XM Radio to survive.

Tempting, but we should leave the conspiracy theories to the X-Files or Fringe fanatics. A large part of the blame clearly rests with the radio outfits themselves, which loaded themselves up on debt that will be coming due next year.

Sirius Chairman Mel Karmazin has noted that it costs only $0.43 a day to subscribe to satellite radio. That's almost identical to what it costs to buy a share of the company's stock. For a dollar, you can subscribe to Sirius XM, buy its stock, and still have change left over. CAPS member ethanbryson underscores why many investors think it's only a matter of time before Sirius' stock becomes a success:

I can't live without my Sirius radio in my car and over the Internet while at work. I don't know how anyone even puts up with terresteral radio anymore. It's only a [matter] of time before this company starts to turn a profit.

While its low share price means you can't currently rate the stock on CAPS (the service has a $1.50-per-share floor), it doesn't mean you can't watch it carefully.

Speaking of flat tires ...
It's obviously a bad time in general for any stock related to automakers, as GM (NYSE:GM) and Ford (NYSE:F) struggle to get consumers to buy any rides this year.

One stock caught up in this malaise is tire maker Goodyear. Pressured by high oil prices and flattened by nonexistent car sales in North America, Goodyear is stuck in reverse; its shares having fallen more than 72% since they topped out at $36 a share last year. I should have taken my own advice last year, when I warned that the tire maker was a toxic brew. However, CAPS member funkmetric likens tires to other consumer staples that ought to do well in a down market: "tires, cereal, toiletpaper, etc. youre gonna need em. Im buying while theyre on sale"

A Foolish quotient
There are many factors that go into whether a stock is a buy or sell, so it pays to start your own research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from a stock's CAPS page. Head over to CAPS today and share your thoughts with other investor analysts on whether you think these stocks make the grade.

Fool contributor Rich Duprey owns shares of Goodyear -- all the way up and all the way down -- but does not have a financial position in any of the other stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.