Governance Defined

Abstract

Corporate governance has re-emerged as one of the most significant business topics of the early twenty-first century. Governance — which we define as the structure and function of a corporation in relation to its stakeholders generally, and its shareholders specifically — is not, of course, new.’ It has been widely discussed, debated, and analyzed for many decades, ever since joint stock companies moved into the mainstream of the global economy.² It has also been the focus of reform proposals over the past three decades, as successive waves of corporate problems — some appearing in isolation, others made obvious by difficult economic times — have yielded a variety of recommendations.³ With recovery in economic growth and corporate profits, however, reform proposals have often been pushed aside. While certain modest improvements might occur, the commitment to sweeping and sustained reform within the global corporate system has not yet appeared.