The one indispensable ingredient: Amidst the wreckage of our scandal-ridden institutions, ethical exemplars must emerge.

• Author: Horton, Thomas R.
• Position: Some Things Considered - Brief Article

LIKE THE accounting profession, corporate governance this year suffered a big and, sad to say, well deserved hit to its reputation. As usual, simple answers are being sought. To every human problem, claimed H.L. Mencken, there is always an easy solution -- neat, plausible...and wrong.

But there is nothing easy about responsible governance. It requires deep thought, hard work, and diligence.

Meanwhile, the pursuit of the quick fix for management, as opposed to governance, continues. Last year's best-selling business books consist of The 17 Indisputable Laws of Teamwork, The 21 Irrefutable Laws of Leadership, The 48 Laws of Power, The 108 Skills of Natural Born Leaders, and 1001 Ways to Reward Employees. Cannot a guide to improved governance, such as My 25 Favorite Board Practices, be far behind? If so, I can wait.

Our mania for glib business advice reached its apex 20 years ago with the publication of In Search of Excellence: Lessons from America's Best-Run Companies, by Tom Peters and Robert Waterman. Inspired by what was described as extensive research on what works for the best, we began to "manage by walking around" and tried to learn to "fire without aiming."

Yet, somehow our challenges remained. How could these prescriptions work so well for the nation's best-run companies and yet not work for us? The eight basic principles (e.g., "Simultaneous loose-tight properties") were held sacred by many as the revealed truth, though these "distilled findings" had simply been jotted down by Peters, he now says, while awaiting an early morning meeting with PepsiCo executives. Indeed, last year, after having extracted millions of dollars from gullible audiences attending his live bloviations, Peters confessed ("boasted" would be more accurate) in Fast Company magazine that he had faked the book's data, though he regards this particular act of dishonesty as "pretty small beer."

The "best-run" companies reported on were not chosen through any scientific process, as anyone who had read this book might have concluded, for it soon became obvious, as one after another of the excellent companies tanked, that this work was less a product of scholarship than a serving of hucksterism. Peters relates how he selected the best-run companies: by asking consultants and others he knew, "Who's cool? Who's doing cool work?" From the tone of his confession, it would appear that he regards his whole bogus process to have been "cool."

The ingredient notably missing in...