It is wellknown that capitalism can not be left on its own without some
rules that might appease its darker face.
In the past decades and, in different industries, we have seen the
effects of too a loose regulatory system that has played its role in the birth
of bubbles and in the growing inequalities we are suffering. It is obvious that
public regulations in general need to improve to avoid pathological evolution
of some sensitive industries such as energy, telecommunication and finance.
But what we find now is not necessarily a better regulatory system but
an increasing regulatory burden that does not always cope with the real
underlying issues of the quality of Corporate governance.
An excessive and inadequate regulatory burden to avoid systemic risks
in any industry, might become a risk in itself. That’s why regulations should
be very much focused on guaranteeing a proper balance in Corporate Governance,
the existence of countervailing bodies within the companies so that the actions
of the executive teams can be adequately supervised and fostering that the
profile of the persons in charge of both, the executive teams but also the
supervisory bodies, have the right experience and the adequate personal values
and moral convictions.
Luckily, lots of companies in many different sectors in the world, are
already sticking to the best practices of building a solid governance model
with constructive countervailing powers. These kind of companies are normally
also very much aware of the need of hiring the best professionals and
supervisors, not only in what respects to their knowledge and experience but
also in what regards to their personal values and ethical behaviors.
These companies do not need so many regulations because the way they
look at their economic role in society is already based on ethical values and
they understand that there is no better regulation that the one that starts
with their own governance model. Policy makers should consider those companies
as role models and not as threats to the mainstream thinking.
