8 - Corporate governance
Published online by Cambridge University Press: 05 June 2012
Summary
Quis custodiet ipsos custodes?
(Juvenal)The accumulation of all powers … in the same hands, whether of one, a few or many, and whether hereditary, self-appointed or elective, may justly be pronounced the very definition of tyranny.
(James Madison, Federalist No. 47)Our proposals aim to strengthen the unitary board system and increase its effectiveness, not to replace it … It must, however, be recognised that no system of control can eliminate the risk of fraud without so shackling companies as to impede their ability to compete in the market place.
(The Cadbury Report)It is not hard to see why there has been such interest recently in so apparently unlikely a subject as corporate governance. The scandals of the past few years, in Britain and elsewhere in the international world of business, culminated for many people in the Maxwell affair, where a powerful individual seemed to have ruled a business empire virtually unchallenged and, in the process, to have ruined the lives and hopes of thousands of pensioner stakeholders in his enterprise. In this case, the law appeared to have been systematically broken and, while it was recognised that no system of control can completely protect against those prepared to ride roughshod over legal and conventional arrangements, questions were inevitably asked about the role of those who had held positions of power in the Maxwell empire. What about the board? Where were the other executive directors? What were the non-executives doing?
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- Business Ethics at Work , pp. 130 - 150Publisher: Cambridge University PressPrint publication year: 1995