Corporate Governance

Many attempts are being made to improve corporate governance in the wake of the last financial crisis. But few seem to be tackling the real issue that our top-down paradigms, rooted in transactional, unitary, economistic notions need to be reinvented in favour of a more practical model.

The compromised boardroom climate is a serious obstacle to good governance. Proposals for reform that focus on who sits at the table address only the surface of the problem. Poor decisions are the result of flawed processes as well as the absence of truly independent non-executive directors.

Companies need to adopt network governance, which would allow for greater self-regulation, self-governance, cooperation and communication among all stakeholders. By instituting a series of checks and balances, a system of having multiple boards would prevent power abuse as well as cultivate transparency and trust. Companies also need to globalising governance and localising accountability.


 

Our thinking 

The corporate governance relies on three critical anchors – shareholders, management and the board of directors. When they work together, they provide a powerful set of checks and balances. But when they malfunction, company’s reputation is damaged.