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Chapter 9. Looking Ahead: The Core Roadm... > The Concept of Corporate Governance

The Concept of Corporate Governance

The idea of corporate governance usually refers solely to the manner in which executives act, including degrees of leadership, ethics and honesty, and modes of reporting to the board of directors and various committees of the board. It includes more, of course. Strong corporate governance calls for the executive to take bold initiatives. We have seen the beginnings of reform; corporations like General Electric deciding to expense stock options before being required to, for example, shows that leaders who see the trend of the culture not only can anticipate that direction, but can actually lead others there by their own decisions.

The Big Picture: Disclosure Standards

The ultimate determining factor in how effectively corporations are managed rests with the decision by management to operate under a specific level of disclosure. It seems apparent that if a corporation is run by people of high character, then the level of corporate governance will be high as well, whether required by law or not. On the other hand, if management lacks integrity and is self-serving, then individuals are more likely to look for ways to circumvent law and regulation.


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