This chapter:

• establishes the area for review;

• examines existing theories of governance and indicates where and how they do not describe the real world accurately;

• introduces the concepts of procedural, behavioural, structural and systemic governance;

• suggests alternative definitions for governance.

Introduction

Corporate governance has been the single most significant issue on the business agenda nationally, internationally and globally for the past thirty or more years. Although it may not have always appeared under the same title, its successes – and more particularly its failings – will have affected every working individual in every economy across the world during that time. Most importantly, the financial cost of recent failures of corporate governance (since the turn of this century) and the worldwide governmental response to them, will affect at least two generations of workers yet to enter the workforce worldwide, with incalculable political and social consequences.

Given this level of importance and impact, it seems important that we get the study of corporate governance issues right. This might reasonably be expected to include not simply a tour of what exists now but also an examination of how we got here – since to mix up a couple of aphorisms, those who do not understand the lessons of history are condemned to repeat them: the first time as tragedy, the second time as farce.