Ireland remains one of the top ranked countries in terms of corporate governance, according to a new report.

The study, by US ratings agency Governance Metrics International (GMI), of 3,800 companies across more than 50 countries ranks Ireland fifth behind Canada, the UK, Australia and the United States.

Nineteen Irish companies were surveyed on a range of issues including the separation of roles, the number of independent directors and the existence of separate audit and compensation committees.

Investors' impressions that emerging market companies may have poor corporate governance has been borne out by the GMI research. GMI included 321 companies from 25 emerging market countries for the first time in its latest ratings research and found that the overall rate for the sector was below average. Only two emerging markets companies were above average - Taiwan Semiconductor Manufacturing and Goldfields of South Africa.

The GMI data, which is updated every quarter, is also beginning to reveal in more detail the risks inherent in companies in the developed markets.

The research is now showing links between a consistently low rating and risk of serious irregularities.

For example, at European Aeronautical Defence and Space (EADS) this year, information about delays in the delivery of contracts was kept within a small group of executive directors and the company subsequently suffered a 25 per cent drop in its market capitalisation. EADS has had a below average corporate governance score since 2003.

Gavin Anderson, GMI chief executive, said: "We cannot identify what the problems in the future might be, but with companies that appear not to have a strong culture of accountability and transparency, the chances that they will have a problem relating to governance in the future are increased."

Mr Anderson said his researchers used about 400 metrics and subjective analysis. - (Financial Times service)