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Approach – The Guard®Investor Protecting Index measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain.

The basic methodology is provided by Djankov, La Porta and othersThe Law and Economics of Self-Dealing, Journal of Financial Economics, June 2008.

Ratings – HBDO’s short-term GUARD®Investor Protection Index indicate the potential level of default within a 12-month period. GUARD®Investor Protection Index is assigned on an alphabetic scale from ‘A’ (Prime Quality Grade) to ‘E’ (In default).

Categories WB (DB) Rates HBDO RATINGS
 Prime Quality Grade 10 -8 A
High Quality Grade 07-05 B
Medium Grade 04-03 C
In default 02-01 D
01-00 E
   

Source:Powered by HBDO Indexes, propelled by the World Bank, 2014.

Ex: HBDO affirms #Norway at ‘B’ – High Quality Grade | GUARD®Investor Protection Index

ie: Norway rated at ‘B’. It means Norway get a high quality grade on the strength of investor protection :  a high quality grade on the strength of minority shareholder protections against directors’ misuse of corporate assets for personal gain.