ABSTRACT
Wealth creation always precedes wealth distribution and requires autonomy, freedom to prosper but more importantly good governance (accountability) to sustain and develop. Autonomy and freedom to undertake may prove worthless in isolation and only an accountable and transparent autonomy, as suggested by corporate governance, would seem to be the panacea. Corporate governance is seen in this book as all the principles, mechanisms, and processes that are used to govern organizations ethically. Today and in the aftermath of serious embezzlements in major corporations throughout the world due to failures of diligence, ethics and accountability, that is, corporate governance, are becoming a powerful means of value creation (Gompers, Ishii, & Metrick, 2001). Indeed, “corporate governance has a role of vital importance to play one that is often not fully understood” (Oman, Fries, & Buiter, 2003). Most corporate governance works have, however, concentrated on immediate governance mechanisms like board structure and committees. On the other hand, most of the literature on the subject had originally taken a narrow view that aimed at ensuring that firms are mainly operated in the interests of shareholders. As commonly underlined, however, the theoretical justification for such a view is based on the existence of a perfect and complete market and in this is something that cannot be encountered in most countries. Consequently, these assumptions are far from being reasonable (Allen, 2005). In such case, a broader view of corporate governance, one that focuses on ensuring that society's resources are used efficiently, may prove to be more appropriate.
