Video / Articles by Patrick Dixon - 24 million requests in year - 10 million visitors - Conference Speech/Event?
The
Future of Corporate Governance
Taking personal responsibility
for economic and ethical performance of corporations - Corporate governance and business
ethics articles by Dr Patrick Dixon, who was ranked as one of the 20 most influential business thinkers alive today (Thinkers50) in 2005. More than 10 million different people have visited this site.
"Fund management risk - many retail funds sold by people who don't believe in them"
Video of event for fund managers - many fund managers I talk to at events do not recomment their own retail funds to family or friends and are doubtful about future performance compared to simple tracker funds. Potential for major reputational risk.
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Business Ethics and Profitability - Articles by Dr Patrick Dixon, ranked as one of the 20 most influential business thinkers alive today (Thinkers50 in 2005 survey) . More than 10 million different people have visited this site.
Corporate governance media interviews: +44 7768 511 390 - media log
Failure in corporate governance is a real threat to the future
of every corporation. Corporate governance as a business ethics
issue is a hundred times more powerful than the internet or globalisation
and can destroy your business in a week. To make matters worse,
standards of corporate governance are changing rapidly in response
to random events which capture public imagination. In business ethics,
what was good is becoming bad and what was considered bad is now
good. Standards for corporate governance that have worked for decades
are looking old fashioned or immoral while other practices that
raised questions are becoming totally acceptable.
So what is going to happen next in corporate governance? How can
corporations use corporate governance to restore confidence and
protect themselves against tomorrow’s headlines? What will
be the new “Gold Standard” for corporate governance
and business ethics? How much further than legal minimum requirements
for corporate governance should corporations go to ensure sustainable
success?
• When corporate governance goes wrong who gets blamed?
• Impact of media allegations of dishonesty, fraud or corruption
of senior executives or directors – and how to protect business
ethics reputation using robust corporate governance
• Why goalposts for corporate governance will go on changing,
and how to get ready
• Urgent need for all corporate governance to be whiter than
white, with unquestionable business ethics and risk management
• Ensuring corporate governance compliance - board duties
of care and responsibility in the future?
• Defining clear areas of corporate governance responsibility
of boards and directors
• Using corporate governance to balancing interests of different
constituencies and stakeholders
• Why we have to separate board scrutiny role from management
power
• Ethical / society responsibilities of directors and large
investor “owners”
• Independence of audit, nomination and remuneration committees?
• “Duty of curiosity” by directors to ask very
awkward and sensitive questions
• Improving quality and flow of information within a corporation’s
governing structure
WHY WE GOT IN SUCH A MESS
Free market ideology was that corporations were kept responsible
to customers, shareholders, workers and society by customer and
investor behaviour, seen in share price. Millions of individual
“voters” in the market place ensured they behaved. “Bad”
corporations were punished by selling. “Good” corporations”
were rewarded by buying. “Market forces will sort it all out”.
This ideology weakened the idea of corporate governance and accountability.
WHY WE STILL CAN’T TRUST THE NUMBERS
• Conflicts of interest remain in all audits even where consulting
links are abolished
– Concerns that some auditors are looking for jobs in the
companies they audit
– Auditors under pressure to get next year’s audit business
– Old accounting standards do not always give fullest picture
– Globalisation and e-technology are making reliable audits
extremely difficult
EXPECT MORE CONFLICTS OF INTEREST AMONG
GLOBAL AUDITORS
Consolidation at top end of professional service organisations means
global players are running out of firms to approach to provide independent
advice over large complex deals
• Conflicts of interest are growing rapidly – made worse
by the collapse of Arthur Andersen, with companies in danger of
representing the interests of more than one party
• Expect future accusations of breaks in “Chinese walls”
TRUST TAKES YEARS TO WIN AND HOURS TO
LOSE
System of corporate governance must win trust of the international
community
• Steps to rebuilding trust in the corporation
– T ransparent – totally open, going beyond current
requirements or expectations
– R esponsible – clearly acting in the broader and longer
term interests of all
– U ncompromising – total commitment to highest moral
positions
– S uccessful – great results combining excellence in
all areas with strong values
– T emperate – taking care to avoid major risks, wild
decisions and extravagance
CEO CONFLICTS OF INTEREST MUST BE DEALT
WITH
• Making decisions that benefit the CEO at expense of the
future of the company, made worse by the large stock options given
and other triggered incentives,
• Hiding how much the CEO takes - non-recording of stock options
as an expense, overly-complex complex reporting
ACCOUNTABILITY CONFLICTS FOR STAFF
The fundamental issue at the heart of many recent scandals
• “I did what I was told” –
• So who do you serve? Your boss? The boss of the boss? CEO?
Board? Shareholders? Customers interests? General public? Courts
of law? Your own conscience?
• Extreme pressures on employees to toe the official line
• Harassment and threats by people representing huge power
HOW CONSULTANTS AND ADVISERS GET COMPROMISED
Who is the consultant or adviser accountable to if things are discovered?
• To the individual who set up the arrangement and is asking
for the advice (who may be part of the problem)? His or her boss?
The CEO? The board? The shareholders? The government? Consumers?
The public? Who do you tell and when?
• What are the limits of confidentiality in consultancy?
HOW THE MEDIA CAN BE COMPROMISED
• Media investigation should be a powerful corrective force,
exposing wrong-doing, but media depends on advertising. Dangers
of alienating big funders of media companies.
• Media is also sensitive to news manipulation and lobbying,
including benefits for journalists writing stories
• Need for transparency – declaring interests of journalists
and editorial team including those of the owner(s)
HOW GOVERNMENT CAN BE COMPROMISED
• Lobbying budget in US greater than GDP of 57 nations
• Over 100 lobbyists per Member of Congress
• $5bn a year industry designed to create new laws or regulations,
change existing ones, limit corporate liability, create barriers
to entry for competitors, change who gets elected
• Potential for corrupting the democratic purpose
• US Government shell-outs to business are worth more than
$300bn a year
• Selective tax breaks, trade policies and spending programmes
are all sensitive areas
• risk of corruption and danger of distorting free market
HOW CORPORATIONS CAN OUT-GUN GOVERNMENT
LAWYERS
• Government will increasingly target corporations as well
as individuals with legal action
• Large corporations have deeper pockets than legal budgets
of government
• They often get better quality representation from huge heavy-weight
teams
“SUCCESS PLUS” –
Doing great things in the right way
Success itself is being redefined – fundamental rethink about
the purpose of corporations. Corporate responsibility will be far
more widely interpreted. REAL SUCCESS will be everything we have
previously taken for granted in high performing companies PLUS the
highest ethical standards in all areas.
BUILDING A BETTER WORLD –
core value and universal slogan
Corporations will be expected in future to “build a better
future” – not only for their shareholders but also for
their customers, workers, business partners, community, nation and
the wider world. Those with effective corporate governance based
on this core value will have an added competitive advantage: attracting
and retaining talent and generating positive reactions in the marketplace.
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Blogs - web / video diaries on trends / management by Dr Patrick Dixon
Video / Articles by Patrick Dixon - 24 million requests in year - 10 million visitors - Conference Speech/Event? 
