European Perspectives: Regulation against stewardship

European Perspectives: Regulation against stewardship

Governance innovation for Europe

‘AstraZeneca faces legal action’ ran a recent headline by the BBC World News – the company supposedly not fulfilling its contractual obligations to Europe.

Yet comment from within the Brussels bubble was of a blameless AstraZeneca. The firm is simply in the firing line of a European Commission that has no other levers to pull other than that of those available to a regulator. What the COVID crisis has highlighted is that to address issues of social and economic concern requires substantially more than threats of increasing regulations and compliance protocol.

The governance of Europe progressively parallels the compliance mindset of the private sector. From the Barings Bank scandal of the 1980s through to Enron, Marconi, Parmalat and the current UK Post Office’s travesty of justice, scandal after scandal has been met with ever greater regulation in the hope it would prevent repetition of the ills of the past.

There exists a commonly held misconception that effective governance focuses solely on compliance. But it is also stewardship and oversight, namely the oversight of the assets requiring care with the prime duty of the guardian(s) to determine how greater value can be realised than is currently the case.

Therefore the two governance levers at the disposal of bodies like the European Commission are compliance and stewardship. Against all evidence, disruptive and unwelcome occurrences have been met with increased controls and protocols, which have had the effect of inhibiting the discretionary choice from those in charge. The result, even more scandals!

Other news