Firm Says Poor Governance Puts 3 Higher-Education Companies at Risk of ‘Outright Failure’

An independent firm that evaluates companies on their financial and corporate-governance practices is warning endowment and pension-fund managers and other institutional investors that three major higher-education companies – the Apollo Group Inc., Corinthian Colleges Inc., and Education Management Corporation – "should be considered very high-risk holdings by investment fiduciaries."

"These are not just poorly governed companies; these are companies that seem to have been run with little regard for sustainable value" and are based on a business model heavily dependent on the industry's prior political ability to foster favorable government policies, said the firm, GMI, in a report released Thursday.

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