Are companies still a good idea?

Yes, if they are responsibly run. According to former High Court Judge Michael Kirby, The idea of an independent corporation, governed by directors and accountable to shareholders, was a brilliant one. It permitted people to raise capital from the public, to invest it without, in most cases, a danger of personal risk and to engage in entrepreneurial activity which, otherwise, would probably not occur. The provision of rules limiting the liability of the corporation and defining the relatively rare circumstances in which its directors would be personally liable when things went wrong. The imposition of duties on the directors to act, as such, with honesty, skill, care and diligence.

What happens if there is corporate irresponsibility?

According to former High Court Judge Michael Kirby, … and he wrote this before the global financial collapse... "Never before in Australian history had so much money been channelled by so many people incompetent to lend it into the hands of so many people incompetent to manage it….The excesses of the late 1980s and subsequent corporate losses have highlighted a litany of accountability and control problems in both private and public sector organisations. Several collapses in the private sector, such as those of Rothwells Banks, the Skase media empire, the Bond group and various property developers, have reverberated in the public sector and combined to financial disasters experienced by government owned banks. In Victoria, the financial collapse of Tricontinental cost the government an estimated $2.5 billion, while South Australia lost $3.2 billion through the demise of the State Bank of South Australia ... The political fallout from these disasters has contributed to the governments in Victoria, South Australia and Western Australia being removed from office. The social and financial implications are still being felt in those states as government funding for schools, roads, hospitals and other much needed social infrastructure is cut to help finance the losses".

Do you have more up-to-date figures?

ASIC’s Belinda Gibson, in June 2009, said that as a result of the global financial crisis, major corporate insolvencies and market failures account for some $73b of lost value or 6.2% of 2008's GDP. That's more than the 1988 market crash. Insolvency statistics have reached an all time high and the economic downturn is clearly affecting the real economy and real people.

What sort of activities do whistle-blower campaigns target?

Insider trading is one... – in 2008 ASIC commenced a very focussed enforcement program, targeting prosecution of the insider trading and market manipulation offences. We have worked closely with ASX in detection and with the CDPP in prosecution. We have finessed our own processes. At present we have formal investigations into some 32 possible insider trading breaches. Thirteen of these involve company directors. Recently the Queensland Supreme Court handed a hefty two year sentence with a minimum 14 months to serve to a company officer who traded illegally.

What is corporate governance?

"Corporate Governance" as a concept includes corporate management, control and transparency.The configuration of Corporate Governance is determined by applicable law, market self-regulation and enterprise-specific principles.
Essential elements of good Corporate Governance are:
• open and transparent communication
• absolute respect for the interests of shareholders
• efficient cooperation of the Board of Management and Supervisory Board and efficient control of the Board of Management through the Supervisory Board
Under CLERP 9 it includes standards of ethical and righteous behavior in the personal and professional area, particularly regarding the handling of conflicts of interest and the application of the highest corporate disclosure standards. According to Australian legislation, Strong corporate governance is critical to the long-term creation of stakeholder value.