Karthaus, LarissaLarissaKarthausvon Meyerinck, FelixFelixvon MeyerinckSchmid, MarkusMarkusSchmid2023-04-132023-04-132021-07https://www.alexandria.unisg.ch/handle/20.500.14171/110258The E-index is one of the most widely used proxy variables for corporate governance in empirical research. We show that ISS data contain a significant number of measurement errors and misreported values. We use alternative databases to manually check deviations across databases and to construct a corrected E-index. We then revisit analyses conducted in three well-known and widely-cited studies using the E-index and compare results from using either ISS or corrected data to construct the E-Index. The results show that data errors in ISS result in a substantially overestimated negative association between the E-index and firm value. Moreover, data errors in ISS lead to incorrect conclusions regarding the relationship between the E-index and different measures of operating performance and analysts’ earnings forecasts. In summary, our results show that data quality is an important issue when measuring corporate governance.enCorporate governanceEntrenchment indexData qualityMeasurementworking paper