By Lucy P. Marcus
The views expressed are her own.
In the past couple of weeks we’ve seen board-related stories from Japan with Olympus, India with Tata, Italy with Finmeccanica, South Korea with the Korea Exchange Bank (KEB), and more. Each story brings up a different issue around corporate governance, but taken together they raise a fresh question: Is a new global approach to board ethics emerging?
Corporate governance rules and requirements are distinct in different countries, and are often bound up in local attitudes and cultures. Yet there now seems to be emerging an overarching and universal ethic and attitude towards boards, board service, and the responsibilities boards and their members individually and collectively need to fulfill.
Part of the streamlining stems from the fact that most companies of a certain size operate across several jurisdictions, and therefore companies that are subject to differing rules operate to the strictest or highest standard. Another factor is that with transparency comes a new ability to look into the operations and actions of boards, and with this shift, public sentiment and ethical judgments come into play. Yet another factor is that in an increasingly globalized workplace where cultures mix, long-established cultural norms are challenged and the (mal-) practices they have given rise to get publicly questioned, as in the case of a British CEO of a Japanese company.
Also, there are issues that capture attention in one country and then move their way around the world. For example, the issue of gender diversity in the boardroom has been discussed for a number of years internationally, but Norway’s introduction of regulations for quotas has had a galvanizing effect, and legislating for gender diversity beyond simple non-discrimination rules has become a substantive item of discussion in other parts of the world, as can be seen with proposed EU legislation, as well as individual European states including France, Germany, and even the UK.
“That is the way we do things here” doesn’t work in Japan anymore. “We can’t find good enough candidates to fill the slots” won’t fly in the face of calls for diversity. Filling posts with big names who are comforting on the face of things, and then are left to operate without proper oversight, doesn’t seem as convincing or reassuring in the face of Rajat Gupta or John Corzine.