As economists and politicians weave elaborate explanations about the causes of the current financial crisis, from greed to deregulation, it is worth articulating the vital role that corporate governance—or rather the lack of it—has played. According to Rainer Geiger, OECD Regional Advisor for the Middle East, “The crisis provides an opportunity for change. With corporate governance, it is not only the rules that matter, but the practice of them.” Clearly, the practice has fallen far short, and improving it rests as much on high ethical standards as it does on laws and regulations. Just as the Asian crisis of the late 1990’s and the Enron debacle highlighted the dire need for improved corporate governance, recent market failures should provoke re-evaluation of corporate governance standards and their implementation. This is not an easy argument to make at this moment, when the very fundamentals of free market capitalism are under attack.
The Financial Crisis, Corporate Governance, and Change in the Middle East
Does the current financial crisis undermine the credibility of corporate governance efforts--or prove they are needed now more than ever?
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