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Volume 32, Issue 3

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Monday, 19 November 2007 21:36

Regulatory Compliance

Written by  Belinda Wilson, CBCP

Corporate governance is the system by which companies are directed and controlled. It is the way in which the corporate boards and officers set the policies and handle the affairs of corporations. Initially, the focus of corporate governance was to protect shareholders of the corporation, but with increasing emphasis being placed upon corporate governance and associated policies, current thinking defines corporate governance as a corporation’s responsibility to stakeholders (irrespective of share ownership). This fundamental shift means increased importance on external influences (e.g., new government regulations) and the need for corporations to be proactive in responding to governance variables, as opposed to the typical reactive mode in years past. The primary driver of corporations finally beginning to give governance issues priority were corporate scandals (Enron, Adelphia, Arthur Anderson, et. al.) that shook the confidence of stakeholders and raised the ire of legislators on a global basis. The perceived and actual failure of corporate