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Reforming Corporate Governance
Nader, Ralph
26/4  (Summer 1984): 126-132 *

Over the past one hundred years, the impact and range of the modem corporation over the world, its peoples and future generations, have been vastly extended. Large concentrations of capital, new technologies, and the accumulated experience of using power have been major factors in the dominance of the multinational corporation. Yet the board of directors, the corporation's governing institution, has changed far less than that which it is directing. Between the company and its board, there is an evolutionary mismatch, if the standard of board responsibility is applied to the legitimate demands which today can be made upon the directors. Probably nothing has highlighted the board of directors in capacity more than the bribery scandals of the seventies and the collapse of companies. In these cases the board of directors was severely humiliated because the mismanagement and crimes were known about and often condoned at the highest executive levels of the companies over a period of time. Yet the boards either did not know, did not want to know, or did not want to do anything about what they knew. Inescapably, the spotlight was on the board and the manner of its non-function.

 

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