Governments worldwide play a pivotal role in promoting good corporate governance.
According to an OECD report on Principles of Corporate Governance, governments have realised the synergy between macro-economic and structural policies like corporate governance. Corporate governance is now considered as a key element, among others, that improves economic efficiency, growth and stability as well as encouraging private investments. For this reason mainly, governments now play or should play pivotal roles in promoting good corporate governance in their respective countries.
Lead by example
Governments should be proactive and take leading roles in directing the course of corporate governance in their economies. While companies on their own can adapt to changes in economic trends, there is need for governments to take a leading role by introducing policy frameworks that facilitate or promote good corporate governance in companies.
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