Governance Intel: March 2012

Busara Governance Intel Newsletter

Welcome to Governance Intel, the first newsletter of Busara Integrated Governance, a division of Busara Leadership Partners. Our quarterly newsletter will explore issues of governance, strategy and leadership that we hope will be of interest to you.

In this issue we explore the controversial, but little-aired, issue of “Ethics, Sex and Power” – do men and women have differing ethical beliefs and responses to ethical transgressions? We also look at why having courage is a pre-requisite to being an effective board member.

Ethics, Sex and Power

Our media is rife with reports of unethical conduct by both men and women. We also often read stories of unethical sexual behaviour between persons where there is a power differential – that of supervisor or manager and subordinate. This started me thinking: do men and women have differing responses to ethical transgressions? And if they do, would a woman’s response to a situation change when she is in a position of power? Women have been fighting inequality on all fronts for centuries. We want to be treated equitably and we want to occupy positions of power without obstacles being put in our path. Are we, however, willing to rationalise certain unethical behaviour to achieve the power? Are some of us in fact becoming transgressors as we rise to power?


Can't stand the heat, get out of the boardroom!

The economic crisis and the prolonged global downturn and uncertainty have placed immense stress on organisations which have added greater demands and pressures on boards. There has been a demand for increased regulation and legislation, especially with regard to governance, transparency, sustainability and accountability. Personal values and ethical aspirations of boards are implicit in good corporate governance. When we assess the financial crisis and the corporate scandals that have rocked our world in the past few decades, in retrospect, it appears that board members were fiscally irresponsible and negligent in their fiduciary duties. Ethics without the courage to stand up for and to act in line with one’s belief system, keeps corporate governance in the realm of theory and ideals rather than practice. The lack of potent courage that is required for assuring organisational integrity could have been contributory to corporate failures and the economic crisis. It is likely that some board members did not have the courage to intervene timeously so as to not be seen as being distrustful of the motives and activities of the management, their practices and internal controls.


What is Good Governance?

Governance has become an issue of global importance. An important theme of corporate governance deals with issues of accountability and fiduciary duty, essentially advocating the implementation of policies and mechanisms to ensure good behaviour and protect shareholders. Well-defined and enforced governance provides a structure that, at least in theory, works for the benefit of everyone concerned by ensuring that society adheres to accepted ethical standards and best practices as well as to formal laws. Laws and regulations alone will not improve governance practices. You cannot legislate ethics. Good governance is about effective, ethical leadership based on the universal governance principles of transparency, fairness, responsibility and accountability.


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