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Samuel DiPiazza, chief executive of PricewaterhouseCoopers, and Robert Eccles, president of Advisory Capital Partners, were thinking about new models of corporate governance long before the current crisis, so this slim volume seems surprisingly well thought-out compared to some of the other volumes that appeared in the wake of the year’s scandals.
The authors call for a three-tiered approach to corporate reporting, starting with a set of truly global generally accepted accounting principals; including standards for measuring and reporting industry specific information; and eventually expanding to provide company specific information on strategy, risk management practices, and performance measures.
It’s particularly encouraging that DiPiazza and Eccles, despite their accounting background, do not define governance narrowly in terms of financial information, or financial audiences. Indeed, the first element of public trust, they say, is “a spirit of transparency. Corporations have an obligation to provide willingly to shareholders and other stakeholders the information needed to make decisions.”
They call for the release of nonfinancial information including information on value drivers such as effective customer relationship management, development of human capital, and improvements in the innovation process—echoing some of the arguments made by Low and Kalafut in Invisible Advantage.
