Abstract:
Corporate governance crisis and reform is essentially cyclical. Waves of corporate governance
reform and increased regulation occur during periods of recession, corporate collapse and reexamination
of the viability of regulatory systems. During long periods of expansion, active
interest in the conformance aspects of governance diminishes, as companies and shareholders
become again more concerned with the generation of wealth, rather than in ensuring governance
mechanisms are working appropriately for the retention of wealth, and its use for
agreed purposes. This cyclical historical saga revolves around the enduring agency and stewardship
dilemmas of governance. Complacency concerning corporate governance during confident
times compounds ensuing crises. Such dilemmas are universal in market systems,
though internationally with different systems of corporate governance the unwinding of this
saga has occurred at different times, for different reasons, and with different consequences.
Corporate governance is about wealth generation and risk management, and these duties
require continuous and simultaneous perfonnance. Avoiding mandatory restrictive overregulation
requires active market regulation, particularly at times of expansion. The drive to
make corporate governance both improve corporate performance and enhance corporate
accountability will continue.
