According to a recent report from data analytics firm GlobalData, repeated corporate governance failures are damaging consumer trust in big business.
The report contends that aggressive tax avoidance, corruption, excessive executive remuneration, and relentless lobbying have undermined public confidence. Governance dictates "how a company's internal controls are used to inform business decisions, comply with the law and meet moral obligations to external stakeholders," GlobalData explains therein.
The report cites several high-profile cases to illustrate these failures. Boeing's board, it alleges, failed to hold management accountable for deteriorating safety controls, which led to a 32% drop in share price in 2024. Similarly, failures like that at FTX — which has been attributed to lax governance and internal control failures — contribute to a growing distrust among consumers, GlobalData argues. "Public confidence in big business has never been particularly high, but there is growing skepticism towards large corporations," said report author Pinky Hiranandani, an Associate Project Manager at GlobalData.
GlobalData breaks down corporate governance into four pillars: corporate structure, risk management, corruption and bribery, and ethics. The report offers recommendations for companies to mitigate risks, emphasizing that robust governance practices are essential as regulatory, economic, and technological pressures intensify, particularly with the rise of artificial intelligence.
Join The Discussion