Corporate Governance and Reputation: A Disaster Story

It is often commented that it may take a company generations to acquire a solid corporate reputation and only seconds to lose it. One of the fastest ways to lose a corporate reputation is enduring a disaster in corporate governance. The scale and contagion of the recent global financial crisis has starkly confirmed this, however episodic crisis and frequent corporate governance failures have punctuated the development of the market system (Clarke 2007). There are many explanations for the recent sustained and intense interest in corporate governance including the growth of international capital markets, the scale of the multinationals, the increasing proportion of individual wealth held in securities with the development of vast investment institutions, and the dawning awareness that if these investments are to be secure there must be effective monitoring and higher standards of corporate governance