Going small, and going international.

• Author: Foran, Margaret M.
• Position: The Shape of Things to Come - Corporate governance - Brief Article

SOME LIKE TO DEBATE whether good corporate governance indeed matters and whether a correlation exists with the bottom line. I believe that most large U.S. public companies agree with the Business Roundtable's Statement on Corporate Governance, which states: "The absence of good corporate governance, even in a corporation that is performing well financially, may imply vulnerability for stockholders because the corporation is not optimally positioned to deal with financial or management challenges that may arise."

Consequently, the majority of large U.S. public companies have adopted, using a wide variety of approaches, many of the broad principles that are associated with good corporate governance. And, as these companies have embraced the principles of corporate governance, the benefits have been realized by their investors.

So what's next? While most large U.S. companies (as well as many large companies in certain other countries, such as Canada and the United Kingdom) espouse good corporate governance, many smaller companies and non-U.S. companies have not as yet adopted the broad principles that are generally accepted as contributing to good governance. Since the goal is long-term shareholder value, it makes sense that, going forward, the greatest "bang" from corporate governance activism will be derived by improving the governance standards at those companies.

Several organizations, including the...