Corporate governance : future perspective in light of the 2008/09 global economic meltdown
Thesis (MPhil)--Stellenbosch University, 2010.
This futures studies research report uses the Six Pillars of Transformation by Inayatullah (2004) as the methodology to explore the future perspective corporate governance may take in light of the 2008/9 global economic meltdown. The problem here being to understand the corporate governance failures that led to the global economic crises and the influences these failures may have in the future of corporate governance. This research report was compiled through secondary research material. The focus of this research report is on corporate governance, in relation to business related activities in particular, as opposed to general governance and not necessarily from a South African perspective only. This is because the South African corporate governance framework, from a legal and principles point of view, is very linked to Anglo Saxon countries’ frameworks and also that the South African economy is globalised (Naidoo, 2009). The description of corporate governance, by Sir Adrian Cadbury of the UK Cadbury Report (1992), as “the balance between economic and social goals, and between individual and communal goals . . . the aim is to align as nearly as possible the interests of individuals, corporations and society” comprehensively describes corporate governance for the purposes of this research report. Of particular note to this description is the multiple stakeholder balance approach, which the South African King Reports subscribe to, for sustainability purposes among other reasons. The anticipation of the future of corporate governance, as the second pillar of futures transformation, is discussed by describing the related emerging issue analysis thereof. These issues include corporate governance convergence and diversity. However, there are significant signs in various parts of the world, including South Africa, and as Keasy, Thompson and Wright (2005) mentioned that show corporate governance convergence more than the increase of corporate governance diversity. The history of corporate governance change patterns, as the third pillar of futures transformation, are explored to bring into perspective the likely changes for exploration on establishing the future alternatives corporate governance systems may take in future. This is in light of the latest major event of the 2008/9 global economic crises. These patterns of history date back from the end of the 19th century through the great depression, the World War II period until the recent major corporate failures that happened worldwide. The future and nature of corporate governance is further deepened, as the fourth pillar of futures transformation, by applying the Causal Layered Analysis and the Four-Quadrant Map in the causes of the 2008/9 global economic meltdown by corporate governance failures. The creation of corporate governance future alternatives, as the fifth pillar of futures transformation, are explored by outlining the possible, probable, plausible and preferred futures of corporate governance from information provided by the referenced writers of this research report. The preferred and ideal corporate governance approach would be a balanced corporate governance approach that has optimally converged due to the impact by the 2008/9 global economic meltdown, globalized and market based. In the last pillar of futures transformation, transforming the future of corporate governance, the policy implications of the preferred and desired future of corporate governance, according to this research report will be outlined, notwithstanding the challenges to achieve this desired future. These policy changes are likely to be both from a self-regulatory and regulatory perspective.