The current financial crisis has revealed shortcomings in the processes and performances of corporate boards which have led to high-profile corporate failures and the wiping out of billions in stocks and shares.
Furthermore, this recession, like every one before it, will undoubtedly bring with it another unwelcome side-effect – an increase in financial crime, such as attempted frauds and money laundering.
These crimes will not simply be limited to people creating false suppliers or not recording some cash sales, but will extend to multi-layered international transactions. While financial crime cannot be stopped, it can more easily be detected in an environment where corporate transparency is encouraged and embraced.
This is why I am delighted to have been invited to be one of the judges for the inaugural Transparency in Governance Awards, organised by the Institute of Chartered Secretaries and Administrators, sponsored by Hermes. We will be looking at the reports of the FTSE 350 companies leading to an awards ceremony in November.
While awards might not in themselves cut fraud, we hope that by encouraging and recognising transparency, an environment will be created in which those who fall short of good practice may find it more than a little uncomfortable when their stakeholders – and regulators – begin to ask questions about what they might have to hide.
Your views welcome as always.
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