I received my copy of the November edition of Corporate Governance: An International Review a couple of weeks ago (yes, they usually run late). It is a special issue on executive compensation with the usual diversity of well-researched articles from around the globe. I notice that most, if not all, of the articles are available online for free, so if you don’t subscribe to the best journal on international corporate governance research, this is your opportunity to see a little of what you are missing… although each issue is substantially different.

I suspect the contents are being made available in conjunction with their 20th anniversary.  That’s three years longer than my own site on corporate governance. While my site represents the unedited ramblings of one shareowner concerned with the fundamental rules and fairness of capitalism and democracy, the International Review has always contained the best peer-reviewed research available. Founding editor Bob Tricker did a fantastic job of pulling it altogether, as did subsequent editor Christine Mallin. William Judge continues in that distinguished tradition.

One of the briefer articles in the edition is a review by Nell Minow of Antonio Tencati and Francesco Perrini’s Business Ethics and Corporate Sustainability (Studies in Transatlantic Business Ethics), Edward Elgar, Cheltenham, 2011 , 264 pp, ISBN 1849803714, which I also reviewed here. (As a brief aside, Edward Elgar has become the publisher for studies on international corporate governance.) I thought it worth clipping a few bits of Minow’s review.

 “Sustainability” is another term for what we often call “the long term” and I would suggest it is a better one. “Long term” can be a conveniently dismissive way to “kick the can down the road” or, to use a popular Wall Street acronym, IBGYBG (“I’ll be gone; you’ll be gone”). But the word “sustainability” requires us to evaluate each decision today in terms of what it will mean 10 and 20 years from now…

The problem is allowing for the maximum independence, nimbleness, and flexibility in directing private enterprise to promote innovation and market responsiveness while minimizing the problems of agency costs and collective choice. Reducing operating costs by neglecting the environment or by poor treatment of employees can ultimately be expensive. Trust is any company’s most important asset and reputational risk is a financial risk.

“For better or worse, the concept of CSR is not one that describes an objective reality,” write Josep M. Lozano and Daniel Arenas in “Is Multitasker Dialogue Really Possible? Mutual Resistance and Bias in Relationships between Unions and NGOs.” On the contrary: It is the skewed reality of generally accepted accounting principles (GAAP) and other accounting standards that allow us to be in denial by obscuring agency costs and externalities. Just as the financial meltdown bailout money allowed Wall Street to privatize profits and socialize losses, the failure to attribute to corporations the costs of short-term behavior imposes the externalized expenses on taxpayers. The first step is to change our vocabulary. “Corporate social responsibility” is by definition outside and sometimes contrary to financial returns. But “sustainability” and “risk management” more properly describe the goals by which we should measure corporations to ensure that they provide the most stable long-term benefits for investors, employees, customers, suppliers, and communities.

Here’s a few more tidbits from the Review:

CGIR Decade Award: To commemorate CGIR’s 20th anniversary, our Editorial Board voted for one CGIR paper which has had the greatest influence on the corporate governance field. The winning article was: Why Adopt Codes of Good Governance? A Comparison of Institutional and Efficiency Perspectives by Alessandro Zattoni and Francesca Cuomo. Read all the shortlisted articles here.