Corporate governance conferences focuses on crisis

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Speaking at the event, Jo Iwasaki, head of Corporate Governance at ICAEW shared experiences of her expertise in the crisis of a financial crisis, saying that enterprises needed to better predict and adapt to difficulties ahead of problems.

 “A company needs to be sensitive to the full range of its responsibilities, including issues such as aggressive tax avoidance, diversity and executive remuneration,” she said.

In doing so, she added, legislators and regulators can turn their attention toward developing relevant but proportionate regulations for specific corporate needs.

A number of major changes have taken place in capital markets in recent years. They include the growing importance of non-equity financial instruments, new types of equity owners, changes in the services offered by, and the use of, intermediaries, and pressures to harmonise internationally diverse practices in corporate governance.

Furthermore, a number of major business controversies have been widely discussed including on corporate governance, such as state bail-outs of failing financial institutions during the most recent economic crisis, public outcry over executive remuneration, and the lack of diversity on boards.

These changes and controversies present significant challenges to existing models of corporate governance built around the agency theory which sees boards of listed companies acting as agents of absent equity owners. Moreover, the changing nature of capital markets tests the validity of existing models of corporate governance.

Many opinions were raised at the conference including suggestions that companies prioritise measures to recapitalise assets and solutions for controlling and managing cash flow and investment.

It was also resolved that business leaders need to make appropriate decisions to promote the development of long-term business success and build a sustainable business model.