The editorial in the Journal of Governance and Regulation discusses the evolving landscape of corporate governance (CG) and the shift towards a more participatory and sustainable model. Traditionally, CG focused on regulatory governance, emphasising the rule of law, fair legal systems, and impartial enforcement to maximise profits and fulfil shareholder objectives. This approach primarily targeted financial sustainability, management, and auditing methods designed for internal shareholders.
However, this traditional model often led to managerial misbehaviour, administrative audit scams, and accounting irregularities, particularly in public sector institutions and state-owned enterprises. These issues resulted from inadequate governance, accountability, and regulatory frameworks, negatively impacting financial results, shareholder value, organisational transparency, social legitimacy, and market reputation. Consequently, many corporations faced restrictions from both international and local investment markets, signalling the decline of CG models that solely focused on internal and financial sustainability.
In response to these challenges, the concept of corporate sustainable governance (SG) has emerged. SG integrates internal aspects like organisational, structural, and financial sustainability with external elements such as socio-political, cultural, and environmental sustainability. This paradigm shift reflects a global movement towards embracing globalisation, technological progress, and modern business and societal success models.
Policymakers and regulators worldwide are advocating for a transition from traditional CG to SG. This new model emphasises broader concerns of sustainability and responsibility within corporate planning, aiming to achieve both commercial prosperity and social well-being. The editorial highlights the importance of a participatory, multi-tiered sustainability model focused on accountability. In this advanced model, governments, financiers, and public accountability organisations enforce corporate transparency and sustainability practices.
The editorial concludes by emphasising the need for continuous adaptation and innovation in corporate governance to address the evolving socio-political, cultural, and economic landscapes. By adopting a participatory approach to governance, corporations can enhance their sustainability and accountability, ultimately contributing to a more equitable and sustainable future.
Alsaid, L. A. (2024). Editorial: Participatory corporate governance for sustainability and accountability. Journal of Governance & Regulation, 13(2), 4–5. https://doi.org/10.22495/jgrv13i2editorial