16th and 17th centuries: The history of corporate governance begins with the formation of major chartered companies like the East India Company, the Hudson’s Bay Company, and the Levant Company, which created conflicts between investors and managers.
Mid-1970s: The federal Securities and Exchange Commission (SEC) brought corporate governance onto the official reform agenda, marking its recognition as an important issue.
1976: The term “corporate governance” first appeared in the Federal Register, indicating its emergence as a recognized concept.
1978: The Business Roundtable, a group of CEOs from major U.S. corporations, held a symposium on “Corporate Governance in America,” raising awareness and initiating discussions on the topic.
Early 1980s: Law and economics scholars critiqued the prevailing pro-regulatory orthodoxy, arguing that shareholders’ passive involvement in corporate governance posed few dangers due to market mechanisms aligning the interests of managers and shareholders.
Late 1980s: Analysis of corporate governance expanded beyond the focus on U.S. corporations to include international perspectives, recognizing the global nature of the issue.
1992: The Cadbury Committee in the UK published a report on corporate governance, recommending a Code of Best Practice for listed companies. This report had a significant influence on corporate governance practices in the UK and beyond.
Late 1990s: Corporate governance became a subject of global debate among academics, regulators, executives, and investors, indicating its growing importance.
1993: The term “corporate governance” was mentioned only once in the Times newspaper up to this year, highlighting its relatively recent prominence.
Late 1990s: Corporate governance controversies in other markets, such as continental Europe and Japan, led to the adoption of corporate governance practices influenced by the U.S. and UK models.
1998: The Financial Times reported that the corporate governance “movement” that began in the U.S. had become established in the UK and was putting down roots in continental Europe and Japan.
Late 1990s: The Committee on Corporate Governance in the U.S. published a report, emphasizing the need for transparency, accountability, and independent directors.
Early 2000s: Corporate scandals, such as Enron and WorldCom, highlighted the importance of strong corporate governance and led to increased regulatory scrutiny.
2002: The Sarbanes-Oxley Act was enacted in the U.S., introducing stricter regulations and requirements for corporate governance practices.
2005: The Organization for Economic Cooperation and Development (OECD) published its Principles of Corporate Governance, providing guidelines for good governance practices globally.
2008: The global financial crisis further emphasized the need for effective corporate governance in financial institutions and led to increased regulatory reforms.
2010: The Dodd-Frank Wall Street Reform and Consumer Protection Act was passed in the U.S., introducing additional regulations and reforms to enhance corporate governance.
2012: The UK introduced the Stewardship Code, encouraging institutional investors to actively engage with companies on governance issues.
2017: The Business Roundtable released a new Statement on the Purpose of a Corporation, emphasizing the importance of stakeholder-oriented governance.
Present: Corporate governance continues to evolve, with ongoing discussions and reforms focusing on areas such as board diversity, executive compensation, and sustainability.
(Source – The History of Corporate Governance (Brian R. Cheffins, University of Cambridge and ECGI, 2012)
