Can governance be marked out of 10?

Unfortunately the decision that governance is bad only seems to occur after a scandal, but good governance should prevent scandals from occurring in the first place.  Do you think good governance can or should be measured periodically, as part of an organisational health check? What are the right metrics? What are the advantages and disadvantages of publishing the results? 

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  • The current focus on Corporate Governance is welcome and does provide the opportunity to revisit the purpose of corporate governance - arguably, it should be focussed on supporting good business practices, rather than preventing corporate failure. The FRC has recently announced a fundamental review of the Corporate Governance Code, one outcome of which could be stripping the Code back to its principles. This would enable corporates to apply the principles in a way that suits them - and in doing so, encourage boards to consider and discuss what is actually right for them. This in itself ensures governance is being focussed on at board level and would also encourage a move away from the current "tick box" approach, around reporting in particular. The downside of this approach is that it will make make governance harder to measure or compare across corporates, but if that is the cost of true substance over form, perhaps that's no bad thing.