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5/29/2006

why so difficult to enforce corporate governance?

After one year of review, SGX is still finalising a new set of tougher rules for corporate governance. The SGX seems to be wavering. A lawyer was quoted as saying 'Directors will definitely not be willing to sign off on teh financials and the internal controls unless the lawyers and the auditors go through them carefully.' One view even argued that it would be difficult to recruit more directors as they will be reluctant to put themselves in such a position with so much added liability. My response is that this is bullshit. Many will still queue up and want to have 10 or more directorshis under their belts. As another lawyer said, 'It's not just about collecting directors' fees and coming a few times a year for board meetings and once a year for the annual general meeting.' It used to be like that, with very little responsibilities and collecting fat directorship fees. It is time that they be made to work and be answerable for negligence. Otherwise everyone will be scrambling for directorship appointments, some even asking for it as if it is their right. And the more the merrier. Why not, when there is trouble just quickly resign, wipe their hands and get away scot free? Why should public money be given away so easily?

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