Abstract
It has become fashionable in both the scholarly and corporate worlds to lay claim to being the first to have predicted the global financial crisis (GFC) of 2008. As the cliché goes, hindsight is a wonderful thing, and given this analysis it would seem axiomatic that commentators would identify the poor governance of international and domestic financial institutions as a leverage point for reform. And indeed they did - in 1999. In commenting on the lessons to be learned from the Asian financial crisis Jeffrey Garten, Dean of the Yale School of Management at the time, delineated a scenario virtually identical to the GFC, in which lenders and investors in an inherently unstable and overstretched financial system failed to read the signs, deluded themselves about the nature of the markets they were involved in, and fled at the first indication that the good times were over (Garten 1999). This led him to conclude that better governance of financial institutions and corporations was a solution that would help mitigate the next crisis. Yet 10 years later, analysts are still calling for global governance reform, and have extended their criticisms to include intergovernmental processes, which they consider to have lost their legitimacy (Bradford and Linn 2009).
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Notes
- 1.
It should be noted here that not all participants were particularly enthusiastic about the legitimacy of this working group. Two representatives from one national (Australian) environmental NGO questioned its credibility, one of whom dismissed its consultation processes as ‘a classical example of tokenism’, which had sought their views on sustainability, whilst permitting its members to continue destroying the environment as part of their daily corporate activities (personal interview conducted 23/09/09).
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Cadman, T. (2012). The Legitimacy of ESG Standards as an Analytical Framework for Responsible Investment. In: Vandekerckhove, W., Leys, J., Alm, K., Scholtens, B., Signori, S., Schäfer, H. (eds) Responsible Investment in Times of Turmoil. Issues in Business Ethics, vol 31. Springer, Dordrecht. https://doi.org/10.1007/978-90-481-9319-6_3
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