Creating more rules and regulations is no way to fix the governance flaws and management failings exposed by the financial crisis, the architect of the European Union’s governance framework has warned. That would only fuel a growing “compliance culture” and make the situation worse.
Instead, companies should focus on changing the behavior of individual employees, finding ways to make them feel responsible for their actions, said Dutch law professor Jaap Winter. Winter was the man called in by the European Commission after the 2002 wave of financial scandals to determine how corporate governance in Europe needed to change. His subsequent report has guided European governance reform since then.
