Network Governance may be the answer to the present crisis in corporate Governance.Trillions of US dollars in the value of shares has been lost from the lack of trust in the Western system of corporate governance. Governments of the US, UK and Australia are each paying billions of dollars in compensation to stakeholders in corporations regulated by them who lost money from unexpected business failures. Asia can show the world how to avoid this cancer in capitalism.

The old ways of governing corporations can no longer cope with the complexity of modern dynamic large businesses. A new way to govern is required based on `network governance'. Network governance follows the architecture used by nature to construct and govern complex systems like living things. It is based on decentralism, pluralism and associative relationships rather than centralism, a social monoculture that relies only on competitive relationships that dominate the existing form of capitalism.

The fact remains that when the so-called `World Best Practice' is followed, companies still fail. Minority shareholders have not and/or cannot protect themselves against oppression. NEDs have not, and/or cannot, control management. So-called `independent' directors have not had the information, the will, and/or the power to act to protect themselves, let alone investors and stakeholders. The integrity, reputation and net worth of well meaning NEDs is compromised. Audit committees have not worked, or made auditors independent to protect them from manipulative management. Indeed, US research reveals how audit committees provide a way of bonding the auditor to the directors rather than to the shareholders.

There is a crisis in corporate governance according to Professor Bernard Taylor who is an examiner of the Institute of Directors Diploma Course in the UK. Harvard Business School Dean, Tim Clark, supports the view that the problem is systemic. He uses the metaphor of rotten apples in a barrel, but suggests that the barrel itself is rotten. "What we really need is a wholesale revamping of the systems of governance and the web of laws and regulations. The solution is to remake the barrel with new legislation and new regulation."

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