ly by self-regulation, relying on a club culture to keep individuals in line. This has begun to fail, most notably in collapse of Lloyds as a result of systematic abuse within certain syndicates, and in fraud cases such as the Distillers .Tribal loyaltiesThe governance structures which tend to rely heavily on the great and good of society. These are people of similar background and education and who find it easy to work together and hence the governance model that emerges moves on the path of least resistance and achieves minimum effectiveness. The failure of effective governance in our country can be attributed to the loyalty and dependency of our corporates to the heavy weights of our society , for developing a purposeful model of governance .Legislative weaknessesThe limited liability system initiated by the Companies Acts and other legislations , laws formulated by the government and other agencies to impose governance have not been as effective as they should have been, which is a matter of common knowledge and need not be gone into. The Companies Act place the ownership of the company solely in the hands of equity shareholders. Holders of preference shares have no rights of intervention unless their dividends are unpaid, investors of loan capital also have limited rights and the directors have unlimited liability and are appointed by the equity shareholders. No other parties have rights under the Companies Acts; employees are subject to employment legislation, customers and supplies are subject to commercial contracts and the government exerts its rights.Are all parties involved in the excitement of the rise of businesses in some way implicated in their subsequent failure, so that they share the group hangover that follows the party as an alternative to assaulting their host is another problem that is yet to be addressed.The outcome of trials under law has been very unpredictable. This is due in part to a legal structure which i...
