Positive Corporate Governance

Abstract

Due to a series of high-profile corporate collapses in our immediate memories, along with regular reporting of shareholder money being spent on corporate jets, executive golf days and increasingly excessive executive compensation arrangements, we could be forgiven for believing that the managers of our largest corporations are self-interested creatures with their heads firmly placed in the trough. This negative perception has certainly had an impact on the way we now regulate corporations, with directors and executives now having to comply with a broad suite of corporate governance requirements. Without such regulation, it is believed, another collapse or scandal is as inevitable as the sun rising in the morning. But what if we take a step back from this general chorus of negative commentary and appreciate there is much that is positive about the character, values and objectives of those in positions of corporate power? If we were to devote our energy on recognizing and fostering the potential and strengths of company executives, rather than simply trying to control them, what impact would this have on the way in which corporations are regulated, the internal culture of corporations, and the relationship between corporations, their executives and the corporation's stakeholders? In this article, the author will deal with each of these issues, and introduces the concept of positive corporate governance as a unifying label to encapsulate the research and thinking on what is good about our company executives.

Keywords: Corporate Governance, Norms, Behavioral Law and Economics, Executive Compensation