Challenges presented, plans developed, costs controlled, opportunities seized and change promoted. This is how some public companies are successfully navigating the changing corporate governance world. The federal government, stock exchanges and, most importantly, stockholders have presented the challenge to companies that they reform their governance and disclosure practices, while at the same time improving, or in some cases reinvigorating, their businesses. Some public companies have responded to this reform challenge by ensuring only that they are technically compliant with the new requirements. But in today's environment, where the opinions expressed by a few institutional investors and an even smaller number of "corporate governance experts" can have a significant impact on how a public company is perceived in the competitive capital markets, technical compliance, by itself, will likely not be enough to differentiate a company.
Moreover, if strict regulatory compliance is the only reason that a company is putting governance and disclosure reforms in place, it runs the risk of "publicly differentiating itself" through negative or poorly timed press in the event ill conceived or ineffective reforms fail the company and its owners, managers, employees and customers. One does not need to look far to see how deficient governance and disclosure efforts, whether actual or merely perceived, can harm a company's business. Loss of government contracts, customers pulling money from mutual funds besieged with bad press, and lenders and other financial business partners limiting their business with "lax companies," these are real world business challenges that can result from a public perception that a company has minimal corporate governance, compliance or disclosure standards.
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