Corporate governance - Shaking it up or stirring it up?.

(From Financial Director)

Byline: Robert Bruce.

The problem is all to do with the motivation of organisations. It is all to do with the conflict between objectives and ego. If the world's corporate giants all became environmentally friendly companies overnight, neither Greenpeace nor Friends of the Earth would fold up and go away.

They have become organisations, and organisations have motivations and egos which retain power long after any objectives have been achieved.

The same is true of regulators. They will never stand back and say their job is done. The more they are successful, the more they will find for themselves to regulate. The net will always widen.

The regulators' job is to regulate and, if they have any eye on an empire to build, they will expand their territory remorselessly.

So observers in the world of corporate governance are watching the Financial Services Authority very carefully at the moment. Its founding chairman, Sir Howard Davies, stands down in the autumn, and another man from the world of regulation, Callum McCarthy, steps into his shoes. At the same time, a new CEO will take up post. The financial and corporate world will be watching closely to see what will happen.