Corporate Social Responsibility – Governments, Corporations and Non-Governmental Organizations:...
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Corporate Social Responsibility – Governments, Corporations and Non-Governmental Organizations: Transparency and Dialogue Transparency and Accountability – Can They be Taken Too Far? December 9, 2008 Edward J. Waitzer STIKEMAN ELLIOTT LLP
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Transcript of Corporate Social Responsibility – Governments, Corporations and Non-Governmental Organizations:...
Corporate Social Responsibility – Governments, Corporations and Non-Governmental Organizations: Transparency and Dialogue
Transparency and Accountability – Can They be Taken Too Far?
December 9, 2008
Edward J. WaitzerSTIKEMAN ELLIOTT LLP
STIKEMAN ELLIOTT LLP | SLIDE 2
>Will the current market crisis lead to a “teachable” moment?
> If so, leaders will need to extend their horizons in (at least) five directions:
– Further ahead
– Beyond financial regulation
– Into other international processes
– Widen the circle
– Look beyond other governments
STIKEMAN ELLIOTT LLP | SLIDE 3
>Leaders will also need to fundamentally reassess the:
– Nature of governance
– Myths of accountability
– Imperative of rebuilding trust
STIKEMAN ELLIOTT LLP | SLIDE 4
What is Corporate Governance? What Works?
Mechanism Effective? Encouraged?
1 Securities Regulators X √
2 Exchanges X √
3 Boards of Directors ? √
4 Statutory Liability √ √
5 Markets for Corporate Control √ X
6 Public Offerings √ X
7 Accounting/Auditing Rules X √
8 Litigation (non-statutory liability) X √
STIKEMAN ELLIOTT LLP | SLIDE 5
Mechanism Effective? Encouraged?
9 Insider Trading/Short Selling √ X
10 Whistle-blowing X √
11 Shareholder Voting X √
12 Controlling Shareholder ? ?
13 Credit Rating Agencies X √
14 Research Analysts X √
15 Hedge Funds/ Private Equity √ X
STIKEMAN ELLIOTT LLP | SLIDE 6
Mechanism Effective? Encouraged?
16 Banks √ X
17 Tax Policy √ X
18 Media √ √
19 Bankruptcy Law √ X
20 Other?
STIKEMAN ELLIOTT LLP | SLIDE 7
Myths of Accountability
>Assumes perfection
>Turns complex systems into complicated systems
>Denies responsibility
>Sacrifices innovation and adaptability
STIKEMAN ELLIOTT LLP | SLIDE 8
Perils of Transparency
>Executive compensation – the “ratcheting up” effect
>Cognitive overload
>Pro-cyclicality
>Reduces diversity
STIKEMAN ELLIOTT LLP | SLIDE 9
Rebuilding Trust
>Need for new reporting and assurance mechanisms
>Reporting as a learning process
>Assurance as a process as well as an outcome
>Embedding sustainability into organizational strategies, operations and cultures
Thank You
Edward J. WaitzerStikeman Elliott LLPSuite 5300, Commerce Court West199 Bay StreetToronto, ON M5L 1B9
(416) [email protected]
STIKEMAN ELLIOTT LLP | www.stikeman.com
