The concerns over corporate governance is as old as the history of first joint stock company, the English East India Company. The recent corporate scandals have re-emphasized the need for better governance.

Good corporate governance, writes Paul Frentrop in A History of Corporate Governance (1602-2002), has been an issue since companies started using the stock market to attract investors. The history of the English East India Company (EIC) and the Dutch East India Company suggest how the first two publicly-listed companies' indulgence in trade and accounting malpractices led to widespread public protests and demand for reforms. What had happened at the Enron and WorldCom, four centuries later, surprisingly reminds of similar incidents in the EIC. In Enron and WorldCom top executives indulged in shady deals to enrich themselves, fudged accounting numbers and kept their shareholders in dark. And, their financial statements hided more than it revealed. A peep into the history of publicly-traded companies shows that these malaises were present in the first publicly-listed company, the EIC itself.

The EIC was a monstrous combination of trader, banker, conqueror, and power broker, all rolled into one; the characteristics which Enron too demonstrated. Share prices were as important as it is today. Although it is not clear whether the company's executives were as laser-focused as Enron's top brass on earnings growth, they were certainly focused on share price. In the article, "Loot: In search of the East India Company," Nick Robins writes that the company's commercial and increasingly political affairs were always guided by its 24 board directors with an eye on the share price.

Corporate Governance, East India Company, governance, history, Corporate Governance, East India Company, corporate, governance, history, East India Company (EIC), Enron and WorldCom, Dutch East India Company, WorldCom top executives, accounting numbers, shareholders, financial statements, publicly-traded companies, trader, banker, conqueror, and power broker, share price.