Corporate governance in a digital age

WE ARE witnessing a quiet but quick transformation of corporate governance. The rise of digital technologies and social media are forcing companies to reconsider how they organise themselves and structure firm governance.

Corporate governance concerns go back to the early 17th century. The Dutch East India Company turned to the public to raise capital for its perilous trade ventures. In turn, investors received paper certificates (shares) that were tradeable on the world's first "stock exchange" in Amsterdam.

Despite the ready transferability of shares, the Dutch East India Company was prone to fraud and deception. Investors soon expressed dissatisfaction with dividend policies and the murkiness of the company's accounts. In response to these deficiencies and to minimise "corporate" wrongdoing, the government demanded greater transparency and disclosure and introduced an early form of a board of directors to monitor and advise managers.