“Advocates of ‘good corporate governance’ tend to focus more on appearance than substance”

Din a 1992 report titled “ Governance and Development the World Bank defined “good governance” as resting on four pillars: competence and efficiency in management; responsibility ; legal framework; information and transparency. It is not these four components that pose a problem, nor the principle of procedural fairness in the management of affairs, both public and private, but rather the idea that good governance is dedicated to resolving complex social and political difficulties – a profoundly erroneous assumption.

Some critics also argue that good governance has always been meant to mask underlying power structures, elevating technocratic decision-making above political conflict. Intentionally or not, proponents of good governance tend to focus more on appearances than on substance: the question of “how” trumps that of “what”, as if positive results were miraculously bound to emerge. healthy processes.

An entire sector has emerged that has come to define and redefine good governance, and constantly create new indicators to measure it. These metrics have become a new “technology of governance,” with metrics serving as performance benchmarks, guiding action, and creating the appearance of real improvement.

Read the survey: Article reserved for our subscribers Social and environmental responsibility: rethinking the business model to adapt to new challenges

Criticisms abound around how good governance is measured or implemented. The real costs of this fad, however, have only recently become visible. Good governance, in effect, has likely reduced the ability of political leaders to solve complex problems, and diverted efforts away from the need to address socio-economic losses in an equitable and politically feasible way.

Few tangible results

Setting the “right” parameters of a decision-making process does not necessarily produce the right results. Implicitly emphasizing economic growth, good governance has neglected the need to take into account distributional consequences as well as negative environmental externalities.

These shortcomings are now highlighted by the climate crisis. Real action is needed to stop pollution if we want our planet to remain livable for most of humanity, not just the lucky few who have the resources to escape the effects of this pollution. Despite the advent of the notion of “ESG” (a vaguely defined concept, which encompasses “environmental, social and governance” criteria), maximizing shareholder value remains the primary objective of “good governance” of companies.

You have 50.43% of this article left to read. The rest is reserved for subscribers.

source site-30