More effective corporate governance

In a panel discussion, several executives talked about the ramifications of the financial crisis for corporate governance and how past shortcomings could lead to better practices. Anne-Catherine Husson-Traore, CEO, Novethic, pointed out that the current crisis has highlighted three key corporate governance issues. First, many companies have suffered from insufficient risk management. Second, rising dissatisfaction with ever-increasing levels of executive pay has given rise to anger among both shareholders and society at large. Third, with a past preference towards self-regulation now having yielded clearly unsatisfactory results, tougher regulation for corporate governance may be required. Following the panel presentation, Serena Lillywhite, of the Brotherhood of Saint Lawrence, added that voluntary self-regulation is not enough, and that more efforts were required to link corporate governance with corporate accountability. She also proposed including the social and environmental impact of corporate actions in the performance evaluations of senior executives when determining their compensation packages.