Governance is critical in the success or failure of large corporations, especially in troubled times when awareness of stakeholders and the global socio-economic environment becomes all the more important. Boards are the most credible sparring partners of chief executives. A high-quality board can turn into a life-saving device for the organisation and be of great support to the business. A weak or uninformed board leaves the CEO a lonely individual at the top to navigate the rough seas of today’s business environment.

Corporations from the east are climbing up the rankings and becoming models, thanks in part to having learned from their own governance failures. China Aviation Oil’s terrible 2004 failure in Singapore was a dramatic example of how supervision and governance in the east could fail (the board did not understand and did not limit the unauthorised speculative trades of the firm). There is a wake-up call in the east, China in particular, to improve governance. The west should follow suit and open its eyes to the governance changes forthcoming in China.

Governance guidelines and processes seem rather set in the west. Size of boards, independence of directors, structure of committees and evaluation processes are all defined. But within this formal system many companies cannot rely on useful boards. The guidelines have failed to create a true board culture. Many institutions are resigned to living with inefficient boards.