Governance in all its 'simplicity'.

From Corporate Governance Failures, edited by James P. Hawley, Shyam J. Kamath, and Andrew T. Williams. Copyright [C]2011 by University of Pennsylvania Press. Published by University of Pennsylvania Press (www.upenn.edu/pennpress).

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THE SIMPLICITY of the term "corporate governance" belies the complexity and nuance of the rules and practices affecting the relationships among the players involved in the ownership and operation of corporations. The term can refer to the command and control of the internal corporate decision-making and reporting processes, including internal financial controls, directed by executives. It can refer to the oversight and direction supplied to executives by the board of directors, and to the leadership compensation practices of the board.

It can refer to the gatekeeper functions supplied by outside professionals, such as attorneys and accountants who assist the board and management in complying with law and with accurately reporting the corporation's financial position, both for the benefit of investors and...