The Australian Prudential Regulation Authority (APRA) has engaged Corporate Governance International Pty Ltd (CGI) to provide it with rating and analysis of large regulated banks, insurance companies and fund managers listed on the Australian Stock Exchange (ASX).

According to Charles Littrell, APRAs Executive General Manager Policy, Research and Consulting, the move further strengthens the agencys surveillance of regulated entities, in this case about 20 of the largest institutions under its regulatory responsibility.

"These entities collectively manage about half of the $1.5 trillion in funds regulated by APRA. Strong corporate governance forms the foundation of strong risk control. Conversely, weak corporate governance is a signal to APRA to look more closely at an entitys ability to repay depositors, policyholders or superannuation fund members. The analysis by CGI will supplement the assessments that we already make ourselves," Mr Littrell said.

APRAs supervisors will also analyse corporate governance more broadly across the almost 4,000 entities subject to its prudential regulation. APRAs new "PAIRS" risk rating system includes explicit assessment of the strengths and weaknesses of boards, or of trustees in the case of superannuation funds, in relation to corporate governance.

CGI has been reporting on the governance of the major Australian listed companies since 1994 and is the leading Australian corporate governance analyst for institutional investors. It produces governance ratings on the top 100 ASX-listed companies, and individual governance analysis and annual meeting proxy voting reports and recommendations on the top 200 ASX-listed companies.

APRA is the prudential regulator of the financial services industry including banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, friendly societies, and most members of the superannuation industry. It currently regulates $1.5 trillion in assets for 20 million Australians.