Governance is not micromanagement. The board’s job is not to run the company, but to ensure the company is running toward the right horizon.
Why it matters: Every failed bank (Silicon Valley Bank 2023, Lehman 2008) had a risk register. The failure was not identifying risks, but ignoring them. Principle 7 forces action. 9 principles of corporate governance
Why it matters: Without strategic clarity, management drifts into short-termism—cutting R&D to boost quarterly earnings, which destroys future value. Governance is not micromanagement
Accountability is a cornerstone of good governance. Not only governmental institutions but also the private sector and civil society organizations must be accountable to the public and to their institutional stakeholders. The board and management must take full ownership of their decisions and be prepared to explain their actions to shareholders and regulators. 9. Strategic Vision The failure was not identifying risks, but ignoring them
Beyond shareholders, engage with employees, customers, regulators, NGOs, and local communities. Solicit feedback not just at the annual general meeting (AGM), but continuously.
Why it matters: When companies hide liabilities (e.g., Enron’s special purpose entities), the market corrects violently. Transparent companies enjoy a lower cost of capital.