Beyond Form: Transparency and Accountability

• Author: Allan C. Hutchinson
• Pages: 291-313

291



Byon Fm:

  

here secrecy or myster y begins, vice or roguer y is not far o.

~ Samuel Johnson

T     of democracy are far from sel f-evident

or universally accepted. However, it is clear that democracy is neither

all about process nor all about substance. Although the relation be-

tween process and substance will be uid and evanescent, there will

always be the need to eect a subtle and shiing blend between the

two. is broader and more nuanced understanding of democracy

leads to an obvious diculty. e two fundamental principles to

which democracy is committed (majoritarian processes and substan-

tive justice) are, at worst, incompatible and, at best, in continuing ten-

sion. at is most obvious on the larger constitutional and political

stage. I n line with one principle —t he will of the c itizens as ex pressed

through the available political procedures should govern— any limits

on this exercise of popular power are unjustiable. But this principle

competes with another equally important one: the majority cannot

do whatever it likes in the name of democracy. ere are certain out-

comes that cannot be tolerated in a society that claims to be just, no

matter how democratic the procedures that gave rise to them. Accord-

PART THRE E: MOVING FORWARD

292

ingly, for a state of aairs to be worthy of the label “democratic,” there

must be a balance between the procedural and the substantive dimen-

sions which, being contingent and contextual, will change and vary

over time. As such, democracy is decidedly about much more than

majority rule: it involves a recognition that democratic processes have

to be supplemented and constrained by substantive commitments.

Somewhat par adoxically, therefore, demo cratic procedures do not al-

ways guarantee democratic outcomes, a nd democratic outcomes need

not always res ult from democratic proc edures.

is basic conundrum is also present in any eort to introduce a

democratic model of corporate governance. It is essential to establish

that those entrusted with the authority and responsibility to oversee

and run the operation of the corporation are as representative as pos-

sible of the various constituencies that make up and are aected by

the corporation’s activities. Yet it is also as important to impose cer-

tain substantive requirements on those persons to ensure that deci-

sions made and activities undertaken by the corporation comply with

a more developed and demanding standard of democratic regulation.

e imposition of a broader and more stakeholder-friendly notion

of duciary duty on the board of directors is, of course, part of that

general commitment (see chapter ). However, there are a number

of other important demands which any duly elected and representa-

tive board of directors must still meet if it is to live up to democratic

expectations. In particular, in line with the basic precepts of demo-

cratic advancement (see chapter ), it will be important to introduce

measures of accountability and transparency: that, as between those

few with power and those many others whom they represent, there

are eective methods to enforce duties and responsibilities; and that

there is a meaningful and full exchange of information and knowl-

edge. In both instances, the justication is that greater accountability

and greater disclosure will better advance the democratic project. In

many ways, without such substantive mechanisms, the existing and

proposed measures to democratize corporate governance wi ll be more

“show” than “go.” And democracy is interested in changing realities,

not merely in improving appearances.