Researchers, investors, and policymakers around the world have been focusing increasingly on corporate governance. There is now widespread recognition that adequate investor protection can substantially affect not only the value of public firms and their performance but also the development of capital markets and the growth of the economy as a whole. This view has naturally led to heightened interest in identifying and bringing about corporate-governance improvements at both firm- and countrywide levels.

These developments also have sparked substantial demand for reliable metrics for evaluating the quality of corporate governance in public firms. Such metrics can facilitate research on corporate governance, inform investment decisions by institutional investors, and guide efforts to improve governance by both private and public decision makers. Both academic researchers and shareholder advisers have made considerable efforts to develop such metrics. These metrics in turn have been used by more than one hundred academic studies, have been extensively utilized by practitioners, and have had a large impact on corporate-governance research and practice.

The notion of a single set of criteria to evaluate the governance of firms around the world is undoubtedly appealing. Both investors and public firms are, after all, operating in increasingly integrated global capital markets. This Article argues, however, that the quest for a single, global governance metric is misguided.