Corporate governance: Quality at the top

Good governance is often observed in its absence - the failure of business leadership to provide adequate due diligence or responsible oversight. In recent years abuse of the top leadership positions of public companies has lead to escalating emphasis on issues related to shareholder responsibility, corporate ethics, and executive compensation. In response to the recent Enron - ArthurAndersen and the Worldcom crises, there has been a call for reform in administration of governance with an emphasis on increasing ethical behavior of management and avoidance of conflict of interest among the competing corporate stakeholders. This interest has focused on corporate reform in both public and private sectors for the way that top executives and board members are held accountable. This call for transformation in the 'rules of governance' is projected to grow as dissatisfaction with the execution of governance provides justification to focus attention on the issue: what is good governance? Good governance delivers benefits to each organizational stakeholder - but the question that is debated is which stakeholder rights are most significant. Good governance plays an important role in the process of assuring customer satisfaction with the management of business in all areas from the flawless manufacture of products and consistent execution of services. It also assists in assuring employee satisfaction with such issues as equitable distribution of fair compensation packages and security of the work environment. The way an organization is governed particularly assures the shareholders that management will make all decisions at 'arms length' and consider ownership's fiduciary interests as a priority. In short, governance defines the value context of the organization and shapes the direction of its mission while setting the long-term business perspective for ethical conduct and effective public responsibility. This paper focuses on the role of quality as a management practice for establishing and implementing processes that support good corporate governance and assure long-term, mutual success for all stakeholders in the modem corporation.