Some shareholder-friendly stocks can't catch a break on Wall Street. And some top-performing stocks pay little heed to their owners' interests. However, between those two extremes, you'll find stocks that score big with the market, but still treat their shareholders with respect.

Institutional Shareholder Services (ISS) -- 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. ISS assigns each stock a rating known as its corporate governance quotient, or CGQ.

Some evidence supports the notion that companies with weaker governance have higher risk, decreased profitability, and lower valuations. To avoid that potential pitfall, we'll look for stocks that Motley Fool CAPS investors have marked to outperform the market, and which 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*





Chevron (NYSE:CVX)




Disney (NYSE:DIS)




IntercontinentalExchange (NYSE:ICE)




US Bancorp (NYSE:USB)




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

Finding good companies and holding them for the long term is one of the greatest secrets to success in investing. But many factors help determine what makes a company "good." How well it treats shareholders shouldn't be least among them. Consider these rankings one way to gauge how these businesses stack up against one another relative to their shareholder policies.

Go to the head of the class
U.S. government regulators have been trying to crack down on nefarious "speculators" who are allegedly behind the volatility in oil prices that we've seen in the past year. The Commodity Futures Trading Commission looks set to endorse position limits as a solution. Such regulation would likely impact IntercontinentalExchange (ICE), which operates a futures trading marketplace.

So far, however, ICE seems to be doing just fine, as shown in its most recent quarter. The company saw revenue jump 27% in the second quarter as trading volumes rose, and July's daily volume surged 34% as its European division saw record trading in oil and gas futures.

The desire to curb speculation may be misguided: One man's speculation might be another man's hedging. Airlines have been very critical of so-called speculators, advocating a crackdown. Yet they actively engage in heavy hedging activities on their own, and those same nefarious speculators stand on the other side of their trades, allowing them to hedge in the first place. As ICE CEO Jeff Sprecher has noted, "It's hard to know, as an impartial market operator, whose hedge should be considered legitimate and whose should not."

Any stringent regulation here in the U.S. would simply move oil and gas trading to more open markets, like those in London and Dubai. Undoubtedly, that's part of the reason ICE saw its European volumes rise: As U.S. regulators ratcheted up the rhetoric, traders moved some business out of the country. As evidence, CME Group (NYSE:CME), the world's largest derivatives exchange, saw its July volumes drop 25% from a year ago. Interestingly, just last week, Britain's financial regulator concluded that speculators had no role in the recent wide swings in oil prices.

Any crackdown would undoubtedly affect ICE, though with divisions in Europe, it might feel the pinch less than some others. ICE has also started clearing credit derivatives in the $26.5 trillion European market, a move that CME and NYSE Euronext (NYSE:NYX) are mirroring.

As electronic trading grows more pervasive and important around the world, investors like CAPS member euzkara figures the volume growth will benefit ICE:

Electronic trading of commodities rather than open out cry trading will be the future for this type of trading, and that coupled with coming commodity price volatility consequential to higher inflation plus the growth in electronic trading of [credit default swaps] contracts means ICE, the leader in electronic platform trading, will benefit enormously from the inevitable significant growth in trading volume in all commodity and financial futures.

A Foolish quotient
Many factors go into whether a stock is a buy or a sell. 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.

NYSE Euronext is a Motley Fool Rule Breakers recommendation. Disney is a Stock Advisor selection and an Inside Value pick. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Rich Duprey owns shares of Disney 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's disclosure policy is a capital idea.