Corporate governance and trust in business

Abstract

The recent prominence of corporate governance was sparked by a decline in trust in business that followed on some spectacular corporate scandals. There is an expectation that adherence to the standards of good corporate governance can restore trust in business. This article examines the link between corporate governance and trust and finds that at least theoretically there is a positive correlation between corporate governance and trust in business. It is however argued that not any form or model of corporate governance will enhance trust in business. An appropriate balance needs to be struck between a number of polarities that exist in the corporate governance reform agenda. Three such polarities are explored and the nature of the balance that needs to be found with regard to each of these sets of polarities is outlined.