Private Sector Opinion

Private sector experts share their insights on key corporate governance issues and trends.


Integrated Reporting: Lessons from the South African Experience. Private Sector Opinion 25 by Jonathon Hanks and Louise Gardiner. Integrated reporting combines the most material elements of information currently contained in separate reports—such as financial, management commentary, governance and remuneration, and sustainability—into a single coherent whole. This article offers historical background and practical guidance for company directors and executives as they approach this relatively new way of communicating with stakeholders. Foreword by Mervyn E. King.

Corporate Social Responsibility: Private Self-Regulation is Not Enough. Issue 24. Michel Doucin begins his article with a fascinating historical analysis of the CSR concept. He identifies its pioneers, including those in emerging markets, and the different interpretations of CSR. He concludes by arguing for genuine international rules to shape a universal CSR framework. The challenge is to build a balance between collective private self-regulation and government regulations.

Culture and Corporate Governance Principles in India: Reconcilable Clashes? Issue 23, by Pratip Kar. This paper explores the dynamics of culture and corporate governance in India by calling attention to three areas where the clashes are strongest: related-party transactions, the promoter's or large shareholder's actions, and the board's nominations, deliberations, and effectiveness.

Corporate Governance in Emerging Markets: Why It Matters to Investors—and What They Can Do About It. Issue 22, by Melsa Ararat and George Dallas. What should investors do when scholarly research on corporate governance in emerging markets does not provide conclusive evidence on which aspects of governance matter most across all the emerging markets and how they affect firm performance? A researcher and a practitioner team up to offer guidelines and recommendations that focus on board independence and business group affiliation.

Optimizing Board Effectiveness with Gender Diversity: Are Quotas the Answer? Issue 21, by Annemarie Durbin. The author cites evidence that using quotas to increase female representation on the board can lead to tokenism, diminish the overall value of diversity on boards, affect board dynamics, and potentially lead to diluted commitments from existing female board directors. She recommends that, instead of quotas, companies should take a holistic approach toward improving board nominating criteria and processes, developing female middle and senior management talent, and ensuring positive dynamics among diverse board members.

Does More Power for Shareholders Undermine Board Stewardship? Issue 20, by Peter Dey. The level of shareholders’ expertise and experience needs to be questioned as they wield greater clout and become more deeply involved in strategic issues that should be the board’s purview. This misdirected involvement, in his opinion, distracts shareholders from their principal and most important role: electing and overseeing boards.

Diversity at the Head Table: Bringing Complementary Skills and Experiences to the Board. Issue 19, by Dr. Yılmaz Argüden. Well-functioning board of directors needs diversity of experience and perspectives. If everybody thinks the same, then there is no need for a board; one individual would suffice! Diversity for its own sake, however, is not an improvement in governance; what matters is the combination of complementary skills and experiences that members bring to the table to better address the challenges the company is likely to face.

How Can Financial Supervisors Improve the Effectiveness of Corporate Governance? Issue18, by John Palmer and Chang Su Hoong. Financial supervisors have an important stake in ensuring sound corporate governance as a strong underpinning for effective supervision. This paper suggests measures that financial supervisors can take to improve governance in regulated financial institutions.

A Corporate Governance Model: Building Responsible Boards and Sustainable Business. Issue 17, by Dr. Yilmaz Arguden, the Chairman of ARGE Consulting, a strategy boutique, and of Rothschild, Turkey. Dr. Ardugen introduces his “CRAFTED” principles of corporate governance that help create value and trust for business sustainability. He also presents a model to measure the quality of corporate governance.

New Corporate Governance in the Post-Crisis World. Issue 16, by Dr. Martin Hilb, Managing Director of the Institute for Leadership and HR Management and its Center for Corporate Governance at the University at St. Gallen Switzerland. The new corporate governance concept Martin Hilb is articulating goes back to the roots of a good corporate governance board, with its ability to act as a visionary and effective decision body, exerting both strategic leadership and control. It's also an invitation to think twice about the applicability of "best practices" in different legal contexts and business models.

Uses and Limits of Conventional Corporate Governance Instruments: Analysis and Guidance for Reform - Part Two. Issue 15, by Simon Wong, Adjunct Professor of Law, Northwestern University School of Law; Former Head of Corporate Governance, Barclays Global Investors Limited. This is the second part of Private Sector Opinion 14. The author points out that CG policy should be tailored to suit local conditions by analyzing Japan’s adopting Anglo-Saxon model. The task for regulators is to create an open framework and ensure that checks and balances are in place that allow and encourage the market to operate an accountability chain.

Uses and Limits of Conventional Corporate Governance Instruments: Analysis and Guidance for Reform - Part One. Issue 14, by Simon Wong, Adjunct Professor of Law, Northwestern University School of Law; Former Head of Corporate Governance, Barclays Global Investors Limited. Part I examines the uses and limits of five conventional corporate governance instruments-transparency, independent monitoring, economic alignment, shareholder rights, and financial liability----and suggests ways to improve their application. Part II (Issue 15) recommends how policy makers could approach corporate governance reform generally.

Towards an Accountable Capitalism. Issue 13, by Stephen Davis, Senior Fellow at the Millstein Center, Jon Lukomnik, program director of the IRRC Institute, and David Pitt-Watson, an advisor to the Royal Society. The authors point out that the fundamental problem lying in the current capital system is lack of accountability and responsibility, which led to the current financial crisis. They suggest a vertical regulation system to enhance the robustness of the interaction between market participants and enable the various entities within the system to be accountable to each other and to hold each other responsible.

Where Were The Directors? Issue 12, by David Beatty, Conway Director of the Clarkson Centre for Business Ethics and Board Effectiveness, University of Toronto, and Founding CEO of the Canadian Coalition for Good Governance. The author proposes methods to improve the effectiveness of boards of directors in the context of the current financial crisis. They include: (1) Equipping boards with adequate expertise to deal with today's complex issues; (2) Managing the time of Directors more efficiently so as to allow strategic planning; and (3) Bridging the expertise chasm between Managers and Directors. This publication is also available in Chinese.

Crashes, Bailouts, Regulations. Issue 11, by Pratip Kar, Dean of Finance and Corporate Governance, Tata Management Training Center, Pune. In the context of India, the author reassesses the existing views on financial markets, the role of financial institutions, market structure, financial products and, above all, on the regulatory architecture in the current financial crisis. The article indicates that there is relationship between sound corporate governance and strong corporate performance, and the crisis also has shown that organizations, especially in financial services sector, need to be founded on an ethical value system if they are to be successful in the long run.

Developing and Implementing Corporate Governance Codes. Issue 10, by Simon C.Y. Wong, Head of Corporate Governance, Barclays Global Investors. The author addresses the key advantage of a code versus a mandatory approach to regulating corporate governance in three aspects: dissemination, flexibility of corporate practice, and transparency. Simon cautions against code “transplanting” and the need for a well thought through process that takes account of the economic and legal environment that shapes firm structure and behavior.

Board Performance Evaluation. Issue 9, by Simon Osborne FCIS, Solicitor, Director, ICSA Board Performance Unit. The article introduces a comprehensive examination of the various processes to implement a board performance evaluation and the most insightful questions to be included in an evaluation. It will help a board to improve its own performance and to act as a value added contributor to the ongoing success of an enterprise.

Governance Scorecards as Tools for Breakthrough Results. Issue 8, by Jesus P. Estanislao, Chair of the Institute of Corporate Directors, President of the Institute for Solidarity in Asia. The article introduces the usage of scorecard tools in helping companies to achieve their governance improvements. It will help to steadily improve company performance and generate above market returns for investors.

News and Corporate Governance: What Dow Jones and Reuters teach us about Stewardship? Issue 7, by Donald Nordberg, Senior Lecturer at London Metropolitan University. In this paper Donald Nordberg, a former senior editorial executive at Reuters who also worked as a consultant for Dow Jones, explores the respective governance of these two media giants.

Reform Realism and the Boardroom. Issue 6, by Philip T. N. Koh, a senior partner of Messers Mah-Kamariyah & Philip Koh. The article contributes to understanding a director's duties of good faith, care, skill, and diligence by implying intellectual honesty and acting in the best interests of the company.

Whistleblowing: Recent Developments and Implementation Issues. Issue 5, by Mak Yuen Teen, Associate Professor of Accounting and Director of the Corporate Governance and Financial Reporting Centre at the National University of Singapore. The author has raised some very important considerations for the internal governance of corporations when he argues for additional legal protections for whistleblowers.

Auditors and Independence. Issue 4, by John Plender, a nonexecutive director of Quintain PLC, a FTSE 250 company. The author reviews the evolution of auditors' role in corporate governance and the challenges in achieving independence.

Corporate Governance: A North American Perspective. Issue 3, by Ira M. Millstein, Senior Partner, Weil Gotshal & Manges LLP, Senior Associate Dean, Corporate Governance, Yale School of Management. The recent wave of US corporate governance failures prompted a round of legal and regulatory reform which has attracted a worldwide attention. The cross-border impact of Sabanes-Oxley has been direct as it extends the reach of US regulation beyond home territory primarily in the case of foreign operations.

Corruption, Economic Development and Governance: Private Sector Perspectives from Developing Countries. Issue 2, by John D. Sullivan, Executive Director Center for International Private Enterprise. Corruption is now widely recognized as one of the greatest barriers to prosperity, economic competitiveness and development, and political and social stability of countries. The key question now is not whether we should combat it or whether it is important - but how can we effectively combat it?

Dealing with Non-Controlling Shareholders: Issues and Best Practice. Issue 1. Christian Strenger, a member of the 'German Government Commission on Corporate Governance' and a member of the 'Capital Markets Committee' of the German Ministry of Finance. Corporate governance has become the DNA of nearly every discussion concerning investment, development and corruption. All with serious implications for economic performance and poverty alleviation.