Good and Bad Coprerate Governance
Bad corporate governance can cast doubt on a company's reliability, integrity or obligation to shareholders - which can have implications on the firm's financial health. Tolerance or support of illegal activities can create scandals like the one that rocked Volkswagen AG in 2015, when it was revealed that the firm had rigged engine emissions tests in America and Europe. Volkswagen saw its stock shed nearly half its value in the days following the start of the scandal, and its global sales in the first full month following the news fell 4.5%.
Companies that do not cooperate sufficiently with auditors or do not select auditors with the appropriate scale can publish spurious or non-compliant financial results. Good corporate governance creates a transparent set of rules and controls in which shareholders, directors and officers have aligned incentives. Companies should strive to have a high level of corporate governance. It is not enough for a company to merely be profitable; it also needs to demonstrate good corporate citizenship through ethical behavior and sound corporate governance practices.
Prior to joining CGI, Mr. Pelosi served as the President of the SF Commission on the Environment, advised NASA Ames Research Center, AirPatrol Corporation, InfoUSA Inc., Oroplata Resources, National Strategies and a host of other organizations promoting sustainability and business development. He also worked with Bank of America Securities, Bank of America Countrywide and JP Morgan - Chase Manhattan for many years in Corporate Finance, Institutional Sales, and the Residential Mortgage Industry.