Business Ethics and Corporate Governance

CHAPTER 20

Corporate Governance in Developing and Transition Economies

INTRODUCTION

The third quarter of the 20th century witnessed innumerable corporate failures, triggered by frauds and scams worldwide. The reasons for such failures went far beyond just corporate misgovernance. Company managements with the connivance of board members and auditors conspired to defraud their stakeholders, both internal and external. The problems of misgovernance were deep-rooted and did not emanate only from the dichotomy between ownership and management. Lack of transparency and disclosures and inequitable treatment of shareholders, window dressing, fudging of accounts and funnelling of corporate funds into private channels were all becoming too common. These ...