The headlines of newspapers of the past few years in particular, portray a dismal story of lack of corporate ethics: Satyam, Enron, falling stock markets, corporate failures, dubious accounting practices, abuses of corporate power, criminal investigations reflect that the entire economic system on which investment returns depend is showing signs of infirmity and stress that have undermined investor confidence.
Almost as if checks and balances that should protect our interests are pushed to one side, driven by the overwhelming need to move fast in relentless pursuit of profits. Notably some failures were the result of fraudulent accounting and other illegal practices, others were just bad governance. Company Boards or Old Boy’s Clubs?