The Way I See ItÖ by Michael C. Volker
Boardroom Governance practices should be voluntary, not dictated
(Optional compliance standards may be a better option to more rules and regulations.)
Confidence and trust in
This Act calls for
sweeping reforms to fight corporate and accounting fraud by imposing new
penalties and a variety of higher standards of corporate governance.† Itís amazing that the
Although this Act applies
mainly to public companies that trade in the
Canadian securities regulators are debating whether the American measures, or some aspects of them, should be adopted here. Doing so would certainly make it more expensive and, in the case of junior public companies, far more difficult for companies to operate.† It would also run counter to whatís been happening in some Canadian jurisdictions.
The British Columbia
Securities Commission used to report to the Minister of Finance. When Gordon
Campbell became Premier last year, he moved quickly on his promise to
streamline the regulatory environment. The Commission now reports to the
Minister of Competition, Science and Enterprise and its mandate has shifted
from being a watchdog to one of making it easier for companies to do business
in B.C. Hence, itís understandable that the Commissionís chair, Doug Hyndman
does not want to simply adopt the new
This isnít a one-size-fits-all situation. Although it may make sense for emerging companies to play by the same rules as the big boys, it may not be achievable in practice.† For example, attracting and compensating dedicated board members is becoming more difficult.
It all comes down to quality. In much the same way that a small company aspires to have quality products, it takes time, training, processes and systems to achieve certain quality standards. Thatís why quality standards such as the ISO-9000 series have been devised. Companies have recognized that, by adopting such standards, customers will have more faith in their products.
So, why not use a similar
approach in the corporate boardroom? Instead of telling companies what they
must do, why not set certain standards that they can voluntarily choose from?
They could state that they are either compliant with certain standards or they
could even go so far as to be certified to be compliant by an independent body.
This would be very useful to investors when assessing corporate values. It
would even be possible to define standards that surpass the mandated
Sarbanes-Oxley requirements, just like ďSix SigmaĒ is in total quality
management. A Canadian technology company that meets such a standard,
could be seen by American investors as a better bet than its
What I like about such an approach is that all companies Ė regardless of how big or small, public or private, can decide whatís best for them. Those that want to achieve higher quality levels can do so and identify themselves as having done so. It may be a great way for companies to attract venture capital investment long before they go public.
The way I see it, the degree to which a company wishes to comply should be a matter of choice. If a company wants to run a sloppy operation, let it. On the other hand, companies that want to achieve excellence above and beyond a prescribed code of conduct will be recognized as such!
Michael Volker is a high technology entrepreneur and