Good Corporate Governance

"Good corporate governance – the rules and practices that govern the relationship between the managers and shareholders of corporations, as well as stakeholders like employees, pensioners and local communities, - ensures transparency, fairness, and accountability… When this trust is undermined, lenders and investors lose their appetite for risk... We need to develop governance tools and incentive structures that are more robust in the face of financial innovation."

Source: Bill Witherell, Head, OECD Directorate for Financial, Fiscal and Enterprise Affairs

What significance does this message have for economic development? In short, it has great significance as communities worldwide struggle to cope with the often dire consequences and disruptions caused by corporate decision-makers everyday. True, nothing is forever, and businesses must be decisive and adapt to their changing environment. Economic developers need to consider these issues and confront their own role in the process of bringing about better corporate citizenship.

Many companies have been working at establishing standards, benchmarks and guideposts to help them decide "how good is good enough enough?" This is no easy matter, as you can imagine. The thought process is what is most significant in my mind, as opposed to rigid standards that everyone must live by--especially in light of the pace of change in our world today.

I'd like to see more discussion about these issues in the economic development community. How about you?

You may find the work of the Foundation for Business and Society to be of interest. Visit its website here.

Download the Foundation's initial report here.