ABSTRACT

The governance of large, listed companies is a hot issue in public opinion. 1 Many people of the developed world are shareholders of a listed company: either they hold shares on their own, or they have their savings invested in financial institutions that act as shareholders. Although the vast majority of these people are unaware of the economic and legal implications of being a shareholder, they care about their money. They would not dare to invest in business ventures they hardly know anything about if they did not rely on the quality of corporate governance; neither would they trust financial institutions doing that job on their behalf, in the absence of ‘good’ corporate governance. Moreover, not only shareholders, but also people in general have an easy culprit to blame should anything go wrong with their money: once again, this is corporate governance. As a result, successes and failures of corporate governance are always on front pages of newspapers. This is particularly the case in this century, because of a series of financial scandals and a long-lasting financial crisis.