Knowledge Center: Publication
Chief Executive Officer & Board of Directors
European Corporate Governance Report 2014: Towards Dynamic Governance2/12/2014
Over the last decade corporate governance – how companies are directed and controlled – has entered the mainstream.
After the ethical scandals from Enron to Worldcom at the start of the new century, greater attention than ever before has been paid to corporate governance both inside and outside corporations. A host of regulations, standards, initiatives, programmes, and much more have emerged; from Sarbanes Oxley to the OECD’s updated Principles of Corporate Governance.
Some of this activity was undoubtedly necessary and useful. But some sought to transform corporate governance into an administrative exercise, a succession of boxes to be ticked. The focus of boards worldwide has increasingly shifted to compliance rather than excellence.
“It is important to pay attention to corporate governance but it must not be allowed to dominate the agenda to the detriment of the board not spending enough time on the business,” noted one interviewee in our research. “The burden of compliance and reporting is becoming too time-consuming,” lamented another.
But, corporate governance can never stand still. Our expectations of boards change constantly – especially in our hypercompetitive and turbulent times. What was acceptable behaviour a decade ago is often now viewed very differently. Companies worldwide increasingly appreciate that effective boards need to move beyond mere compliance to create flexible and dynamic governance.
Click here to access the interactive version of the report.