Abstract
In this paper we examine the effect of corporate governance quality - measured by sub and general indexes calculated by the Institutional Shareholder Services (ISS) - on asymmetric information. Using a sample of 392 non financial UK companies listed in the London Stock Exchange from 2003 to 2006, we find that ISS' corporate governance sub and general indexes are negatively and significantly related with asymmetric information. Only the corporate governance quintile for takeover defence's index did not exhibit any significant relation with asymmetric information. The results suggest that the UK companies have a higher degree of compliance with the code of best practices 2003. This compliance increases the quality of corporate governance and as a result mitigates asymmetric information and contributes in solving the agency problem.