Good Governance Is Good Business

Canadian Speeches, March-April 2003 | Go to article overview

Good Governance Is Good Business

Trust, transparency, and integrity are the cornerstones of good governance. For Canadian companies to gain investor's trust worldwide they must make CEO'S accountable for their companies' actions; begin to vigorously enforce tough penalties for breaches of law; disclose of insider trading faster. The Canadian laws concerning governance must be compatible with other countries to ensure outside investment. Speech to the 2003 Corporate Governance Conference, Toronto, January 30, 2003.


The new expectations of corporate governance sweeping across the world are based on a simple reality--you can run, but you cannot hide. Inquisitive eyes and ears of governments and regulators, analysts and money managers, customers and NGOs, journalists and whistleblowers are everywhere. Communication is instant. Analysis follows quickly. And the market's judgment can be swift and brutal.

In short, anything a company does anywhere in the world can affect its reputation everywhere in the world. Reputation has become the cornerstone of both investor confidence and public trust. What happens to a company's reputation therefore has an increasingly direct impact on its relationships with everyone from governments and regulators to customers, employees and investors.

The growing demand for transparency is reinforcing the role of the market as the primary driver of good corporate governance. Failure to follow acceptable standards of governance can hurt both a company's business and its share price. By the same token, good governance practices are seen as reducing risk and enhancing performance, and therefore constitute an increasingly important competitive advantage.

The impact of governance on competitiveness can be seen on both individual companies and entire countries. For instance, as Ron Fanner of McKinsey & Company noted yesterday, international surveys of institutional investors show clearly that money managers are willing to pay significant premiums for the shares of companies with good governance practices, especially when they operate in countries where the legal framework and norms of practice are weak.

Major investors are also passing judgment on entire markets. Last year, the California Public Employees Retirement System (CalPERS) brought in a new review process to select emerging economies for its stock market investments. Its criteria include key corporate governance measures such as stock market regulation and transparency. As a result of the new system, three markets where CalPERS had investments--Indonesia, Malaysia and Thailand--were blacklisted. The Asia Times recently estimated that the withdrawal from their markets of this one major investor took a total of U.S. $120 million out of the three countries.

This reality, the importance of good governance to companies and countries alike, is what persuaded the members of the Canadian Council of Chief Executives to launch our Corporate Governance Initiative last summer.

Not everyone saw our willingness to take a leadership role as appropriate. Shortly after we launched our initiative, for instance, we received a letter from the Ontario Teachers Pension Plan Board, one of Canada's strongest advocates of improving governance. While welcoming our interest in governance issues, it suggested that we had misunderstood the role of chief executives. Governance, we were told, is the responsibility of shareholders, working through boards of directors and within government regulations: "It is neither the responsibility nor the prerogative of management to set the standards for corporate governance."

Certainly we agree that shareholders, and the boards of directors they elect, have the right to decide how they want their companies to be run. But I reminded our friends at Teachers that the chief executive officer plays a critical role in managing not only a company's operations, but also its reputation. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Cite this article

Cited article

Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25,

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Good Governance Is Good Business


Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25,

    New feature

    It is estimated that 1 in 10 people have dyslexia, and in an effort to make Questia easier to use for those people, we have added a new choice of font to the Reader. That font is called OpenDyslexic, and has been designed to help with some of the symptoms of dyslexia. For more information on this font, please visit

    To use OpenDyslexic, choose it from the Typeface list in Font settings.

    OK, got it!

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search


    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.