Читать книгу Corporate Governance - Quantity Versus Quality - Middle Eastern Perspective - Saleh Hussain - Страница 17

With increased awareness of and introduction of corporate governance codes and practices worldwide, why is the world still faced with financial crisis? Aren't these CG regulations designed to mitigate risks and avoid such disasters from happening? Understandably, many frustrated stakeholders and the public at large question the effectiveness of the regulations and soundness of their implementation.

It is an accepted fact that all corporate governance regulations,like all other laws, are designed to address principles of governance that render best practices of businesses. In addition, they are sometimes issued to rectify certain circumstances or actions that happened in the past. In other words, these regulations could be a reaction to malpractices and improper human behavior. On top of this, no matter what regulations and laws are issued, the human mind is capable of finding ways and means to get around them. Then the question becomes: what would the situation have been if there were no regulations? Certainly the damage could have been far more severe.

The thinking about the relevance of CG in the current world crisis leads us in the direction of implementation and monitoring. The regulations are issued, yes this is good, but is the implementation monitored at the corporate level and by regulators? There are a number of parties people can look to for answers regarding the role played in monitoring, following and respecting issued regulations. In addition to corporate boards and regulators, the roles of the following remain to be known: corporate risk managers, internal and external auditors.

Corporate Governance is an active and dynamic activity and so are the pertinent regulations. The regulations need to be reviewed and updated regularly. The board of directors of any corporation is fully responsible to undertake such review on a regular basis and update corporate codes as frequently as needed. The regulators' responsibility to monitor and update CG regulations cannot be overly emphasized. Most countries in the world issue corporate governance regulations in the form of directives to ensure speed for any further changes to be made. If CG regulations were treated as laws, the cycle of approval through legislative systems and governments would be very long and impractical.

As the reasons for the collapse of large and mega-corporations unfold in future, the current worldwide crisis could offer all of us many lessons to learn about corporate governance. CG would also gain more importance as a result of these crises, and we would witness more emphasis on disclosure and transparency. Lack of or inadequate disclosure and transparency may prove to be one of the major causes of this crisis.