Corporate Governance | Case/Opinion | Comply and Explain OR Comply or Else?

Do you think corporate governance should be enforced through the “comply and explain” model or the “comply or else” model? Explain your answer.

Student responses will vary. 


The “comply and explain” model gives corporations the benefit of the doubt and allows them to explain why they are not complying. 


The “comply or else” model is a much stricter model in which corporations are, essentially threatened to comply or face stiff financial penalties for not being in compliance.


Please state your opinion .....



Source: Ghillyer_Business Ethics A Real World Approach 2e

Corporate Governance | Discuss the payoff experienced by an organization that has a commitment to good corporate governance

Discuss the payoff experienced by an organization that has a commitment to good corporate governance. 

A corporation with a commitment to good corporate governance is more attractive to investors and creditors, and thus becomes more profitable. There have been numerous studies that highlight benefits of promoting good corporate governance.

Source: Ghillyer_Business Ethics A Real World Approach 2e

Corporate Governance | What is the argument in favor and against of merging the roles of chairman and CEO?

What is the argument in favor and against of merging the roles of chairman and CEO?

The argument in favor of merging the roles of chairman and CEO is one of efficiency. By putting the leadership of the board of directors and the senior management team in the hands of the same person, the potential for conflict is minimized and, it is argued, the board is given the benefit of leadership from someone who is in touch with the inner workings of the organization rather than an outsider who needs time to get up to speed.

The argument against merging the roles of chairman and CEO is an ethical one. Governance of the corporation is now in the hands of one person, which eliminates the checks and balances process that the board was created in the first place. This type of situation compromises the independence of the board, and the powers of the stockholders are minimized.



Source: Ghillyer_Business Ethics A Real World Approach 2e