Conclusion

Since I started to write this book, unprecedented upheaval in the performance of corporate America has illustrated the deficit in confidence and trust that poor governance (let alone outright dishonesty) delivers and its direct impact on reputation as well as financial performance. When I started on the first chapter, the US stock market was worth around $24 trillion. By the summer of 2002 it had plummeted to $11 trillion. The failure of Enron and associated demise of Arthur Andersen; the fall of WorldCom, tax evasion charges against the CEO of Tyco; charges of corporate looting against the founder and family members of cable operator Adelphia; scandals associated with covering up manufacturing errors at Johnson & Johnson, and of exploiting a monopoly position at Bristol-Myers Squibb; claims of dubious accounting practices at Xerox, Global Crossing, Qwest, Merck, AOL Time Warner and even the mighty GE, have all combined to create a collapse in investor confidence and stockmarket free-fall. At the centre of these woes is the question of governance — are corporations being economical with the truth by bending the rules of accounting and reporting in order to project a far rosier picture of performance? And if so, who is responsible, not least for the carnage among the stock-based savings that underpin the retirement plans of older Americans?