GUIDES
By InsidEntity Editorial Desk · Jul 21, 2026 · 5 min read
Every article on this desk cites a Company Risk Rating. This page is the rubric behind it: the exact weights, the exact sub-questions, and the exact thresholds. We publish it in full because a rating you cannot audit is an opinion wearing a number.
The four pillars and their weights
The CRR is a weighted combination of four pillars, each scored from 0 to 5. Director Independence carries the most weight, 40%, because it is the pillar built on direct disclosures from directors themselves. The other three each carry 20%.
| Pillar | Weight | What it measures |
| Director Independence | 40% | Six disclosure-based questions answered for every board member |
| Director Capacity | 20% | Board seats held and relevant working experience |
| Auditor Independence | 20% | Years the external auditor has held the audit, by tenure band |
| Shareholder Influence | 20% | Shareholder count and concentration of large holders |
The scale
Every pillar, and the overall rating, reads on the same six-point scale. A rating of 0 is not a score, it is a flag that the underlying disclosure has not yet been made or verified. It is different from a 1, which is an assessed rating that happens to be poor.
| Score | Label | Meaning |
| 0 | Unknown | Not yet assessed. The disclosure needed to score this pillar has not been made. |
| 1 | Risk | Assessed, and the weakest band. |
| 2 | Caution | Assessed, below the median. |
| 3 | Good | Assessed, at or above the median. |
| 4 | Excellent | Assessed, in the upper band. |
| 5 | Benchmark | Assessed, the strongest band: for Director Independence, an independent director with full capacity. |
1. Director Independence, 40%
This pillar is answered per director, from six direct disclosure questions. Each carries its own weight, summing to 5 for a fully independent director:
| Question | Points |
| No family members working for the company | 0.5 |
| Not doing business with the company | 1.0 |
| Not holding shares in the company above 0.10%, directly or by representation | 1.0 |
| Director fee is less than 5% of total income from all sources | 1.0 |
| Not more than 10 years as a director | 1.0 |
| Not an executive chairperson | 0.5 |
The 0.10% shareholding test is calculated against real market data, not estimated. For example, checking a director’s holding at Sasol requires the shares in issue, the share price on each exchange where the stock trades, and the resulting total market value, before the 0.10% threshold is applied to convert that percentage into a share count and a rand value. The same calculation runs for every company we cover.
A pillar score of 5.0 on Director Independence, seen throughout our articles, usually means every disclosure came back clean, not that the questions were skipped. Where a company has not populated a director’s independence declarations, the platform marks that pillar 0, Unknown, and says so on the profile, rather than defaulting to a passing score.
2. Director Capacity, 20%
A non-executive director role is not part-time work. Boards typically meet eight times a year, and committees meet more often than the board itself. Preparing for each meeting, reading board packs, researching, and engaging management, takes real time on top of the meeting itself. The Walker Review, the UK government-sponsored review of corporate governance published after the 2008 financial crisis, concluded that a non-executive director should not hold more than five roles at once. InsidEntity sets the line slightly tighter, at four, on the view that a director should be able to dedicate roughly one working week a month to any single company.
The pillar has two parts. The first scores how many directorships a person holds, out of 1.5:
| Directorships held | Points |
| 1 | 1.5 |
| 2 | 1.5 |
| 3 | 1.0 |
| 4 | 0.5 |
| 5 or more | 0.0 |
A director holding five or more board seats scores zero on this component, regardless of how well they perform at any one of them. Capacity is about time, not competence.
The second part scores each director’s working experience, out of 3.5: industry experience (1.5), industry qualification (0.5), finance experience (0.5), finance qualification (0.5), and legal experience (0.5). Combined, the two parts sum to 5.0 for a director with a full complement of relevant experience and no more than one board seat.
3. Auditor Independence, 20%
This pillar reads directly off how long the external auditor has held the audit, on a sliding scale from a clean 5 down to zero:
| Auditor tenure | Score |
| 1 to 3 years | 5 |
| 4 to 5 years | 4 |
| 6 to 7 years | 3 |
| 8 to 9 years | 2 |
| 10 years | 1 |
| More than 10 years | 0 |
If a company has more than one external auditor, the score is the average across all of them. This is the pillar behind the “auditor clock” language in our company articles: when we say an audit relationship has run past ten years, this table is where that flag comes from.
4. Shareholder Influence, 20%
This pillar has two parts. The first rewards a broader shareholder base, out of 3.0:
| Number of shareholders | Points |
| 1 to 50 | 1.0 |
| 51 to 100 | 1.5 |
| 101 to 500 | 2.0 |
| 501 to 1,000 | 2.5 |
| 1,001 or more | 3.0 |
The second penalises concentrated ownership, out of 2.0, counting shareholders who each hold 20% or more of the company:
| Shareholders holding 20%+ | Points |
| 0 | 2.0 |
| 1 | 1.5 |
| 2 | 1.0 |
| 3 | 0.5 |
| 4 | 0.0 |
This is the pillar we mean when an article notes that a shareholder’s stake sits “past InsidEntity’s 20% material-shareholder threshold.” One shareholder above that line costs half a point out of two; four or more takes the component to zero.
Why this is published in full
A rating agency that will not show its work is asking for trust it has not earned. Every threshold on this page is the one our platform actually applies, to every company we cover, across 145 stock exchanges. If a score in one of our articles looks surprising, this is the page to check it against.
For a broader look at how to read InsidEntity’s rating alongside agencies like S&P, Sustainalytics, and Morningstar, see Company Risk Rating Explained: How to Use Ratings in Your Portfolio. To look up a specific company’s live CRR, director profiles, and committee history, visit InsidEntity.
Know your entity. This is independent research, not financial advice.
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