Magazine article Public Management

A Parallel Governance Principle

Magazine article Public Management

A Parallel Governance Principle

Article excerpt

Like you, I have been both fascinated and horrified by the individual and corporate misdeeds that have occupied the news recently. Every month brings us new cases of ethical compromises that have harmed shareholders, customers, and employees.

Reaction to these ethical compromises has been swift. Business leaders are standing trial. Public confidence in corporate leadership has plummeted. The United States Congress passed and the president signed Sarbanes-Oxley, the Public Company Accounting Reform and Investor Protection Act, in 2002, restructuring the rules of corporate governance. So, while much has been done, I suspect much more is to come.

I have tried to relate the governance crisis in the private sector to our world. I think there is an interesting story to tell. Some of the prescriptions for improving corporate governance may sound familiar. Disclosure of conflicts of interest, independent directors, improved transparency, better accountability and improved compensation systems, plus separation of the board of directors from the functions of management all sound a lot like solutions from our world.

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The new book The Recurrent Crisis in Corporate Governance by Paul W. …

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