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?
Does this imply that rule-based approach is better than principle-based approach?
Corporate governance quality or effectiveness can be measured out of 10, or out of 100, or even classified as A, B, C.... Yet, what matters more is that whether it is useful for the external stakeholders. I tend to believe that the current metrics are flawed and hence can potentially mislead especially investors and analysts.
Governance assessments aren't just for external stakeholders. They should also be paramount for internal stakeholders, in other words management and employees. Good governance signals good prospects for committed workers. We mustn't forget this audience when we think about how to measure governance, and how and where to present these metrics.
Not necessarily. How to mark governance has parallels with how to measure culture, but the audit profession is rising to this challenge. ICAEW's recent publication on how to audit culture outlines three methods: discrete (targeted on a specific risk); component (culture is one element of a wider audit); and consolidated (a single point of view on culture). All methods use a combination of qualitative and quantitative data, as well as ongoing monitoring.