Why We Shouldn't Formalize Good Governance
Posted at 9:45 a.m. on Feb. 20
As global regulators look to empower shareholders and promote good corporate governance, John Carney notes an interesting critique of recent trends from the world’s largest sovereign wealth fund, Norges Bank Investment Management in Norway.
NBIM “questions the popular idea of formalizing good governance into regulatory or legislative codes. Or even of attempting to apply a voluntary code of good governance across all companies… It almost goes without saying that this corruption from best practices to principles to hard and fast rules describes exactly the direction of corporate governance in the United States for the last decade or so.”
“From Sarbanes-Oxley to say-on-pay, we’ve increasingly mandated and federalized corporate governance rules.”
