governance failure

Climbing out of the Credit Crunch

Governance Failure in Banks is Key to Credit Crunch

The principal source of the credit crunch is a failure in corporate governance at banks, which encouraged excessive short-term thinking and a blindness to risk, says ACCA (the Association of Chartered Certified Accountants) last week in a report about the year-long financial crisis. ACCA’s policy paper Climbing Out of the Credit Crunch, examines five key areas: corporate governance, remuneration and incentives, risk identification and management, accounting and financial reporting and regulation – and recommends that accepted practices in all these areas need to change to avoid future failures. Richard Aitken-Davies, President of ACCA, said: "The fundamental responsibilities of a corporate board – to provide strategic oversight and direction, to ensure a strong contr... »