THE CORPORATE GOVERNANCE landscape has clearly changed for the better in the last quarter century. Led by institutional investors and (to a not inconsiderable extent) corporate gadflies, corporate boards have become more aware of and responsive to the concerns and rights of shareholders.
How will the landscape change in the next 25 years? Here are some possibilities, some more certain than others:
* As a result of increasing globalization of capital markets, recent initiatives to harmonize the most fundamental governance principles across borders will continue to progress.
* With the movement in the U.S. from defined benefit pension plans to defined contribution plans, voting power may move from traditional pension fund managers to mutual funds in which individuals choose to invest. Mutual funds will become more proactive in addressing governance issues.
* Shareholders will continue to press for greater scrutiny and disclosure of transactions affecting their interests.
* There will be pressure to rationalize accounting for equity-based compensation schemes, especially stock options.
Now...here's a wild card to contemplate. No answers. Just questions...