This chapter, and the next, will cover issues of ‘counter-governance’ – those activities knowingly undertaken, usually by managers, which work against the effective governance of a company.

Chapter 15 includes an examination of the following issues:

• instances of failure of both procedural and behavioural governance;

• structural governance failure as a cause of corporate collapse;

• the development of counter-governance cultures;

• ‘innocent’ failure;

• the legal view of corporate failure;

• ethics and governance;

• the two ethics view: bluff and knowing misrepresentation.

Chapter 16 looks at particular instances of counter-governance in the form of some sort of abuse of other stakeholders’ interests

• market abuse: cartels;

• market abuse: concealment of information;

• other forms of abuse: environmental crime;

• other forms of abuse: pension funds.

Introduction

The term ‘counter-governance’ is used to denote the negative aspects of governance that bring about failure to secure the objectives for which most companies are presumably established – that is, the creation of wealth for the shareholders (and, to a lesser extent, the stakeholders). It encompasses issues such as corporate insolvency; corporate criminality; market abuse; concealment or manipulation of information by managers; corrupt practices; environmental crime; pension fund abuse; and avoidance of taxation that verges on evasion by virtue of its artificial or elaborate nature. All of these will be dealt with (some in re-capitulation) in this chapter.