Summary
Governance Leadership
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System failure, system renewal.
How should the interests of the public be protected in a governance environment dominated neither by sinners nor saints? And, how can that protection be made available in a manner that does minimum damage to the private enterprise system? It's a tall order, but specific courses of action are clear.
CORPORATE GOVERNANCE in the United States is facing a variety of external pressures for change, many of them involving a larger governmental presence in internal business decision-making. The three most obvious sources of those pressures are (1) the downturn in the American economy in 2001, (2) the terrorist attacks of September 11, 2001, and their aftermath, and (3) the widespread public criticism of business practices resulting from the Enron bankruptcy. The third of these factors is likely to generate the most severe and lasting impacts on corporate governance. The first adverse factor, the decline in U.S. gross domestic product, is likely to be the most ephemeral. Yet, the lingering effects of recessions invariably reduce public confidence in the private enterprise system, making it easier for the advocates of additional government intervention to gain support for their case. Thus, the coincidence of the economic downturn with the other two events is an unfortunate bit of timing. The second factor, especially the comprehensive national response to the rise of international terrorist activities, has generated a longer-term expansion of the role of government in day-to-day business operations. The common characteristics of the great bulk of these interventions -- be they tougher anti-money laundering rules or more extensive inspections of imports or more d...See the full content of this document
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