The Relational Corporate Governance Approach
Corporations, Globalisation and the Law series
Chapter 1: The challenge of corporate governance
The world-wide crisis in financial markets and, in particular, the repercussions on equities markets around the world consequent on the ‘credit crunch’ of 2008–09 and beyond has once again focused attention on corporate governance. Indeed, the fallout from the Global Financial Crisis (GFC) continues to have dramatic regulatory, social, economic and political effects around the world. The crux of the GFC is widely acknowledged as a combination of failures in regulatory supervision, ‘gate-keeping’ by intermediaries, greed and fundamental failings of internal corporate governance. Yet, pre-GFC corporate collapses such as those of Enron and WorldCom in the US, HIH Insurance in Australia and collapses in other countries painted a similar picture. More recently, collapses such as that of the Hastie Group in Australia in 2012 prompt this book to examine what lessons from these collapses have failed to be learnt? And what measures could have been taken – prospectively – to avoid the abyss?