A Sustainable Future for Corporate Governance Theory and Practice

Turnbull, Shann 2012. 'A sustainable future for corporate governance theory and practice’. In Sabri Boubaker, Bang Dang Nguyen and Duc Khuong Nguyen (Eds.), Corporate Governance: Recent Developments and New Trends, Springer, (Forthcoming).

14 Pages Posted: 19 Jan 2012 Last revised: 19 May 2012

See all articles by Shann Turnbull

Shann Turnbull

International Institute for Self-Governance; Sustainable Money Working Group; New Garden City Alliance

Date Written: March 12, 2012

Abstract

This Chapter shows how the natural "science of control and communications in the animal and the machine" identified by Wiener in 1948 can be applied to social organizations to establish a science of governance. The science of governance provides a sustainable future for corporate governance theory and practice. Good governance is defined as the ability of organizations in the private, public and non-profit sectors to achieve their purpose in the most efficacious manner while minimizing the need for laws, regulations, regulators, courts or codes of so called "best practices" to protect and further the interests of their stakeholders and society. Evidence is provided that current best practices: (a) did not prevent firms failing to create the 2008 financial crisis; (b) are not based on theory or conclusive empirical evidence; and (c) are inconsistent with common sense. Systemic problems arising from organizations governed by a single board are identified. These include the absolute power of directors to manage their own conflicts of interest to allow the corruption of themselves and the organization. Examples of organizations with over a hundred boards show how network governance provides: (a) division of powers; (b) checks and balances; (c) distributed intelligence; (d) decomposition in decision making labor; (e) cross checking communication and control channels from stakeholder engagement; (f) integration of management and governance to further self-regulation and self-governance with: (g) operating advantage and sustainability. The examples illustrate how an ecological form of network governance could reduce the size, scope, cost and intrusiveness of government and their regulators while improving economic efficiency, resiliency and enriching democracy with widespread citizen stakeholder engagement.

Keywords: Corporate Governance, Cybernetics, Holonic architecture, Network-governance, Self-regulation, Social tensegrity

JEL Classification: D41, D02, D21, D72, D74, D85, D87, G38, K23

Suggested Citation

Turnbull, Shann, A Sustainable Future for Corporate Governance Theory and Practice (March 12, 2012). Turnbull, Shann 2012. 'A sustainable future for corporate governance theory and practice’. In Sabri Boubaker, Bang Dang Nguyen and Duc Khuong Nguyen (Eds.), Corporate Governance: Recent Developments and New Trends, Springer, (Forthcoming). . Available at SSRN: https://ssrn.com/abstract=1987305 or http://dx.doi.org/10.2139/ssrn.1987305

Shann Turnbull (Contact Author)

International Institute for Self-Governance ( email )

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HOME PAGE: http://independent.academia.edu/ShannTurnbull/CurriculumVitae
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