Some years back we had CSR. This term is now almost defunct, having been replaced with the more overarching values of ESG. More recently, we started reading more about ‘sustainability’. But what these terms all seem to have in common is the fact that these usually provide an easy way for companies and organizations to trumpet their good deeds.

Let’s look at the ‘G’ of ESG – governance. More precisely, and in line with the very nature of these pages, let’s talk of corporate governance.

Corporate governance is a widely used term and has been mentioned, discussed and roped into many fora and discussions.

In his recently published book The Law of Companies, David Fabri says it best: “Corporate governance has proved excellent business with hundreds of conferences but that unfortunately, it has produced loads of hollow talk, repetition and platitudes.”

Dr Fabri continues by saying: “People felt good about themselves discussing corporate governance, but mostly they then did absolutely nothing about it.”

The book’s sixth chapter, ‘Re-thinking corporate governance’ defines good corporate governance as follows: “Good corporate governance implies the proper distribution of responsibilities and efficient inter-play between the major players within a company: the chairman, directors, secretary, senior management, auditors, regulators and other relevant players, in a manner which is directly or indirectly beneficial to all relevant parties within and outside the company and to the community at large.”

Why is corporate governance important? The answer is obvious. But judging from what we have been seeing these past weeks, ‘doing things right and properly’ does not seem too obvious.

There is no denying that most of the current political issues we are dealing with as a country, all stem from the fact that at some point in time, someone could have done the right thing and chose not to. There are many who could have done things properly and instead, chose to stray.

Regulatory bodies play an important role in ensuring proper corporate governance within the Maltese business community. But how does this play in an environment where we are witnessing gross misconduct from the very top?

Events of this magnitude are happening at a political level but that does not mean that the private sector is not immune. These events are bound to leave a huge impact on the business sector, on the financial services sector and on all those whose success depends on Malta’s reputation.

But even though the turmoil is at a political level, this does not exonerate the business community from its duty to demand better standards. It can start by collectively ask some very pertinent questions.

How can institutions contribute to foster good corporate governance?

How far should the law be expected to intervene to correct poor governance practices in the corporate sector?

How can corporate leaders foster a culture of transparency, accountability, and ethical behaviour within their organizations in a more tangible manner?

How can we, through our operations, set a better example?

More than just answering these questions, it is high time we start putting good corporate governance in practice.