Between shareholder-friendly stocks expected to underperform the market and highfliers that pay little heed to their owners' interests, you'll find a happy medium: top-flight companies that also treat their shareholders with respect.

Institutional Shareholder Services -- the big name in corporate proxies -- measures how well a company performs in as many as 63 categories covering four broad areas. Moreover, each company is scored relative to its market index and its industry group. It assigns the stocks a rating that it calls its corporate governance quotient, or CGQ.

Some evidence supports the notion that companies with weaker governance have higher risk, decreased profitability, and lower valuations. We'll be looking at stocks that Motley Fool CAPS investors have marked to outperform the market and that also sport above-average CGQ scores, either in their index group or among industry peers.


CAPS Rating
(out of 5)

Index CGQ Ranking*

Industry CGQ Ranking*

Coeur d'Alene Mines (NYSE:CDE)




Mosaic (NYSE:MOS)








Stillwater Mining (NYSE:SWC)




Walgreen (NYSE:WAG)




Sources: Yahoo! Finance, Motley Fool CAPS. *Relative placement when compared with companies in index or industry. Higher is better.

Although finding good companies and holding them for the long term is one of the greatest secrets to success in investing, there are many factors an investor should consider, and how well a company 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.

Go to the head of the class
The world's financial system is still stumbling around after its multiyear bender, grabbing onto one lamppost after another. Greece's budget deficit is poised to plunge the EU into crisis as investors grow more wary over the country’s ability to find appropriate financing, and Portugal and Spain aren't looking too healthy, either. Suddenly, no one's talking about fleeing the U.S. dollar anymore.

Greenbacks have strengthened against the euro, rising to their highest level in five months -- all of which seems to be pressuring gold and silver. As the dollar rises, precious metals are seen as a less attractive alternative investment, and that could cause prices to drop. Gold and silver producers like Coeur d'Alene Mines, Silver Wheaton (NYSE:SLW), and Hecla Mining (NYSE:HL) are likely to see their stocks weaken as a result. The trio has already given up an average of 8% over the past week, while the gold stocks on CAPS dropped 6% yesterday and silver was down 5%. The market indexes only lost about 1% yesterday as “risk aversion” became the watchword.

Still, investors are looking for gold and silver miners like Coeur d'Alene to bounce because of those very same risks that have built up in global financial markets. While the short-term outlook seems dull, CAPS member frankis believes these companies will still be good inflation hedges down the road:

CDE is just starting the beneficial time of its 3 year building program. Inflation protection should keep the price of silver up and their new gold mine should also create an added stream of income if the price of gold remains high. A silver-Zinc battery in development could replace the li-ion battery in cars and the price could skyrocket. Silver is useful, medically significant and has ornamental value.

More than 1,300 CAPS members have rated the precious-metals miner, and 95% believe it's going to outperform the market. I tend to agree that the fiscal irresponsibility being demonstrated in Washington and capitals around the world will eventually catch up to them, and gold and silver will blow up in value. I've marked the miner to outperform as well, but why not join me over on the Coeur d'Alene Mines CAPS page and polish up your own thoughts on its future?

A Foolish quotient
Many factors go into whether a stock is a buy or a sell, but do corporate governance policies enter into your equation? 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.

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Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings. The Motley Fool's disclosure policy is a capital idea.