Why corporate governance is important.

The word governance may well have been used by Chaucer in 14th century England, but the phrase ‘corporate governance’ has only been commonly used since the 1980s.

Major corporate failures such as Enron, WorldCom, HIH, the dot.com crisis, the global financial crisis, and the Royal Commissions into institutional abuse of children and the banking sector, have increased governance expectations.

The community requires corporations to improve the way in which corporate governance is practiced.

That is, more is expected from companies behaving as good citizens.

Although not a legal term, ‘corporate governance’ does carry the sense of needing to be defined. It regularly arises in actions or Commissions as something lacking in practice.

Yet the concept of corporate governance has struggled to have a single definition. Early definitions were based around corporate governance being the ‘system by which companies are directed and controlled’ (Cadbury Report, 1992; King, 1994).

The Australian Stock Exchange recently broadened the scope of the concept of corporate governance to ‘the framework of rules, relationships, systems, and processes within and by which authority is exercised and controlled in corporations’.

Similarly, the G20/OECD principles discuss how the monitoring of performance against structure of organisational objectives can deliver better
governance outcomes.

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Direction of Australian Aged Care?

Hi Folks,

I am about to board a plane for Singapore where this week I will be speaking at the GCIC 2018 conference on integrated care.

My topic will look at where the industry may go next in its clinical governance responsibilities. I thought this was interesting to look at twenty years on from the introduction of the Aged Care Act in 1997.

I will share my full paper next week and explore some further ideas following the conference. In the Essay, I have strived to briefly describe the history of residential aged care in Australia and show how economic drivers that largely determine the funding of care may also be diminishing the clinical appropriateness of care. This can place care recipients, providers, and program funders alike potentially at risk of failure of service in financially constrained times.

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