Meeting the challenge of sustainability.

Author:Fenn, Scott A.
Position::The Shape of Things to Come - Brief Article
 
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THE FUTURE of corporate governance promises to be exciting. At the boardroom level, the challenges for directors are growing. Not only are corporations more complex, but the pace of technological and economic change is quickening, forcing directors to make decisions under conditions of tremendous uncertainty. Add to this the pressure for board members to be more independent and more diligent in monitoring performance, and the bottom line is that being a director is a tougher job.

From a macroeconomic perspective, it will be interesting to see whether current thinking in governance "best practices" has the momentum to become universal. For the past decade, Anglo-U.S. governance practices have been in ascendancy. Economic crises in Asia and the emerging markets -- often rooted in governance problems -- coupled with phenomenal growth in the U.S. economy, have led many observers to conclude that U.S.-style shareholder capitalism has trumped other governance models. Much of the world is now slowly converging toward the U.S. model. The evidence for this is everywhere -- from the ongoing merger wave among EU companies to the unwinding of cross-shareholdings and massive layoffs in Japan.

Whether this convergence toward international governance practices is sustainable, however, is debatable. Shareholder capitalism has proven to be...

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