Corporate Governance - USA - Fall 2004 Reform - The Wrong Way and the Right Way

摘要

There is almost universal agreement that corporate governance in America is failing. There was a large window of opportunity following public revulsion with the scandals of the 1990s. That energy has dissipated and virtually no "real" reform has occurred. We are in the "worst of times" - unignorable evidence of governance failure persists from the comic criminal of Health Care South to the nearly noble Royal Dutch Shell; equally unignorable is the failure on all sides to come up with credible improvement. Instead, companies complain of the cost of compliance with new laws and threaten to tie up proposals in appellate court litigation; reformers complain of the fail- ure of new initiatives. Have the last several years of public scandal diluted confidence in public markets? Do common stocks remain a preferred mode of preserving and enhancing capital? After all, that is what it is all about -the health of the equity culture. Governance is about the creation of wealth. History records in the United States that investment in equities returns 6 per cent per year after inflation as contrasted with 2 per cent in the bond market. This isn't primarily a question of individual investors getting rich, it is the more important question of enabling government to discharge generous promises -like to pensioners.