30 May- 5 June , 2001
Speaking yesterday at a Corporate Governance workshop organised by the Institute of Directors and the Malta Financial Services Centre, Finance Minister John Dalli urged the long-term participation of shareholders and employees in the running of Maltas businesses.
Emphasising on the benefits of shifting oligarchic corporate structures to those that establish systems of accountability, Mr Dalli expressed the fact that, in the recent past, many companies have found that they can create better products more efficiently with the full mental participation of their employees, while the participation of shareholders adds a similar value.
Citing the OECD's principles, initiatives by the World Bank and the
International Monetary Fund, as well as those in dozens of individual
countries around the world, Mr Dalli contended that the phenomenon of
corporate governance is international. In this respect, Mr Dalli explained
that Malta has not lagged behind.
Mr Dalli explained: "The degree of success achieved by following the above criteria will propagate corporate integrity and help gain credibility in all aspects of society. Ownership based governance is likely to transform corporations into more democratic institutions and institutional investors can unleash the wealth-generating capacity of "human capital" which is based in the skills and knowledge of corporate employees.
"We should not shy away from the issues. Even corporate governance leaders who have been responsible for substantial progress in the field can become unresponsive and hypocritical if they isolate themselves from mechanisms of accountability."
Mr Dalli explained that such measures help to develop faith and trust-worthiness amongst shareholders, consumers, staff and the business sector as a whole, both domestically and internationally.
As such, Corporate Governance reinforces and stabilises business at the grass root's level and moves ahead, with enduring prosperity, through the business itself and its network of related business affiliations.
He added: "A companys corporate image is more likely to be attained through the whole of the corporate process, both internally and externally, rather than merely through cosmetically hyped-up promotion via media publicity and public relations deployment.
"The keys to creating wealth and maintaining a free society therefore lie primarily in the same direction. Both require that broad-based systems of accountability be built into the governance structures of corporations themselves."
Referring to major lifestyle trends that are already encompassing economising, self-learning and health prioritising, Mr Dalli adds, "The movement to more democratic forms of corporate governance by empowering owners is important not only for creating wealth - it cuts directly to our ability to maintain a free society.