The Illusion of Corporate Governance “Best Practices”

The best boards focus on solutions and structures tailored to their companies, ignoring cookie-cutter “gold standards.”

Contrary to what good parents have long taught their children, it’s now acceptable in corporate governance to say “everyone else is doing it, you should too.” Advocates of so-called good governance urge companies to take specific actions because they “lag behind their peers” on some favored practice. 

This is new. A generation ago, the norm in corporate governance was to recognize differences among companies — the need to tailor governance to fit needs, to shun cookie-cutter approaches. In recent years, however, the norm has veered to a universal expectation that all boards should follow identical guidelines, usually anointed as “best practices” or “gold standards.”

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About the Author(s)

Lawrence A. Cunningham

Lawrence A. Cunningham is special counsel for Mayer Brown LLP and founder of Quality Shareholders Group. He serves on the boards of Constellation Software Inc., Kelly+Partners Group Holdings Limited and Markel Corporation


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