This century witnessed some of the biggest scandals in corporate history beginning with Enron. Enron collapsed in Dec 2001 after the stock price sank to less than one dollar, from a peak of $90. Fraudulent schemes of deceptive tricks and accounting misrepresentations, as well as off-the-book partnerships to manipulate Enron's finances made the company appear more profitable than it actually was. The founder Kenneth Lay was convicted on all six counts of corporate fraud and four counts of banking fraud. Enron caused a loss of US$70 billion from the capital market, US$2.1 billion in pension plans, 56000 jobs, and impacted market trust and the public image of the economy.

Lehman Brothers repeatedly exceed its own risk limits, and management made a number of terrible decisions that ultimately led to Lehman's collapse. In 2009, Allen Stanford and his firm were accused of consistently providing higher-than-market returns on CDs to its depositors. The defendants were accused by regulators for misrepresenting CDs as safe by claiming the funds were invested in diversified liquid assets. In October 2009, the founder of the Galleon Group, a big New York hedge fund, was charged with insider trading in the stocks of several companies.

There are many issues that have contributed to the above corporate governance failures. Corporate greed is on the rise and there has been urgency for short term gains. There is a deliberate intention to hide, mislead, manipulate and cheat. There is a reluctance to take investors and regulators in confidence when things go wrong. Excess risk taking without the concurrence of owners and stake holders, has resulted in a lack of Transparency, ethics and values.

In the current business environment, how do we check against these cancerous sicknesses? How do we increase the reliability of reporting? How do we increase investor confidence, consumer confidence and regulator confidence in the institutions? How do we increase transparency in our transactions?

The global financial crisis showcased weak corporate governance, a failure of risk management, and a supervisory failure. The current crisis has highlighted that boards should urgently be taking full responsibility for risks, which should be acknowledged and embraced by the boards of companies in all sectors of the economy.

Corporate structures and cultures should focus on linking performance objectives and combining performance measures, and should have a consistent design and implementation across companies. The current crisis has revealed that employees should not be rewarded for improper risk-taking actions, and the board should ensure that compensation schemes reward a firm's long-term performance. Whilst such a compensation package may vary from one company to another, it is essential that boards define the rationale for their compensation schemes, and take into account the way compensation awards are viewed by the outside world.

Improved oversight over board compositions, improved disclosure and transparency, and the effective use of audit functions are today's priorities for regulators. Global capital flows increasingly avoid markets where information to investors is perceived as weak or not transparent. Institutions cannot afford to ignore the long-term, and focus only on the short term, as the long term is achievable only when it is sustainable.

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