Every organization knows that good governance leads to performance excellence in the long run. Why then, even reputed organizations are suddenly caught in the vortex of market crash and sectoral slump, or by themselves, indulge in corporate malfeasances? Each of these organizations might have foreseen the risk in the subprime investing phenomenon. However, the frailties of some facets of human nature tend to overtake prudence. Corporate governance, therefore, should involve a multi-layered checks-and-balances system. Solutions should be found out and incorporated in the governance program of each organization, more so, when, the time period between major crises now has come down phenomenally.

At times, the overall goal of growth and profit, in the manner in which these are pursued in current times by some important organizations, militate against the long-term interest of the stakeholders and also goes against business ethics. Volumes have been written on corporate governance and business ethics. There have also been continual confirmations and reconfirmations as per the requirements of law or otherwise by various global organizations of repute, that corporate governance practices are in place and these are being meticulously followed. The concerned governments also take upon themselves the role of the protectors of the investors and the stakeholders and frame voluminous acts imagining all kinds of injustices, and proactively prohibiting strings of malpractices and malfeasances. Then the regulators add reams of interpretations, elaborations and qualifications.

These laws are applied to companies running into tens of thousands in number. All sorts of implementation initiatives get documented. In meeting after meeting at all levels, including the highest management level, as also the board levels implicit or explicit confirmations to the extent that all key requirements of corporate governance have been complied with, are obtained. All these in good faith and with the fond hope that all will be well.

Global CEO Magazine, US subprime Crisis, Corporate Governance, Subprime Mortgage Loans, Multinational Corporations, MNCs, Global Financial Crisis, Risk Management, Organizational Goals, Global Economic System, Global Economy, Financial Services.