The urgency for global regulatory, fiscal, transparency and taxation cooperation is long overdue. The inability to cooperate on a global scale is probably the main reason why the world economy cannot recover and conditions to promote a growth scenario is missing.

The term corporate governance emerged in the 1970s in the US. Company legislation has mushroomed in all directions and has created unnecessary bottlenecks for international trade.

Governance failure
The primary objective of corporate governance, besides keeping the company board and management on their toes is twofold, first to strengthen the community with CSR initiatives and secure investor confidence in the companies they invest in. However the continued reports on international scandals and irregularities continue their onward march into the corporate boardrooms.

The collapse of Enron (2001), Tyco (2002), Royal Ahold and Parmalat (2003), AIG (2004), Madoff and Lehman Brothers (2008), Satyam Computer Services (2009), and the consequent credit and financial crisis (2010-2012) has brought several Corporate Governance, Risk Management and Compliance (GRC) issues to the forefront of The Board of Directors and Management’s attention regarding regulatory compliance concerns.

Therefore, national corporate governance code has clearly failed. It has provided little guidance so that the corporate world is on the right side and is unable to avoid major international corporate scandals. There is a need for uniform global governance codes so that global companies do not end at the wrong end of the governance codes.

One of the reasons for the governance failures is that International companies and financial institutions are extremely difficult to govern because conflicting corporate and national interests are often in play.

Regulatory overreach
The combined UK Companies Act today imposes over 1,000 duties on a director, before he can perform his duties as a director for the company he is responsible for and that pays him to do the job of providing a strong return on the shareholder investment etc. The Dodd Frank act (2010) is 2319 pages long compared to the 37 pages of Glass Steagall (1933) act it replaced.

The above situation for the corporate world are just two examples as a result of the regulatory overreach five years after the decline and demise of the fourth-largest bank in the US, Lehman Brothers. The lack of global corporate governance and regulatory compliance mandates was responsible for a scenario that nearly brought the entire global financial system to a meltdown. The lack of global governance has on the other hand given us an economic recession because the global corporate community is unable to resolve global governance issues.

At the June 2013 meeting in Ireland, the G8 leaders missed the opportunity to create a method to supplement or reinvigorate the international tax system so it works better for business and community. Due to the missing international political leadership, the business community and the international community can take advantage of a comprehensive solution that encourages global growth and trade. The G8 nations missed the boat because of their focus on global tax issues.

Instead, the international political leadership can take initiatives to resolve global problems by focusing on global governance issues in general that are relevant for the wider global community at the G20 meeting in September.