The Evolution of Governance — From Trust to Transparency

What does governance really mean — and where did it all begin?

In this inaugural episode of the Governance 360 Podcast, hosts Arvind Kumar and Sapna Gupta dive into the origins and evolution of corporate governance, from early merchant charters and fiduciary duties to modern regulations and reforms. They explore global turning points like the Cadbury Report, Dey Report, and the rise of comply or explain in Canada, while reflecting on scandals like Enron, WE Charity, and the governance lessons they brought to the surface.

They also unpack how nonprofit and private sector governance has evolved in Canada — including the impact of CNCA, ONCA, and the rise of voluntary frameworks like Imagine Canada’s Standards. Plus, a candid take on why Robert’s Rules of Order may no longer be enough in today’s strategic boardrooms.

Whether you're a governance professional, director, or curious learner — this episode sets the tone for an insightful, practical, and engaging journey through governance in all its forms.

🎧 Topics include:

• The story behind “corporate governance”
• What the Dey Report changed in Canada
• G20/OECD governance principles and Canada’s global alignment
• Governance shifts in nonprofits and private companies
• Why legislation alone isn’t enough
• A fresh look at Robert’s Rules in modern boardrooms

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Chapters

• 0:00 Introduction to Governance 360 Podcast
• 0:28 Meet the Hosts: Arvind and Sapna
• 1:15 The Purpose of Governance 360
• 2:19 The Evolution of Governance
• 3:03 Historical Foundations of Governance
• 4:18 Corporate Governance Scandals and Reforms
• 7:03 Canadian Governance Milestones
• 10:10 Governance in Nonprofits and Private Companies
• 14:08 Key Elements of a Governance Framework
• 14:45 The Future of Governance
• 16:18 Conclusion and Next Steps

Transcript

Governance is like a living system shaped by history, tested by scandals and stretched by society's changing expectations. Today we are telling the story of how governance evolved. Why it is still evolving.

Welcome to the first episode of the Governance 360 Podcast. I'm Arvind, and I'm so glad we have launched this new space for real governance conversations. Joining me is someone whose insights I deeply value my co-host Sapna Gupta. So Sapna is an experienced governance professional who has worked across sector from credit union and financial institutions to large and mid-sized corporate.

She holds accreditations from both the UK and Canadian Chartered Governance Institutes and bring a sharp focus on board effectiveness, ESG, and corporate compliance in practice. But more than that, she brings a deep curiosity about how governance shapes organizations and communities. So Sapna, I'm thrilled to have you on this journey with me.

Thanks, Arvind. And I am also equally excited that we are doing this together. 

You know, Sapna, we have had so many chats over coffee about starting an open forum, a space where we could talk about corporate governance and can share our experiences and learnings with our other fellow governance professionals and board members.

And finally, here we are launching a podcast. So how are you feeling about it? 

Mm-hmm. It's true. When you first asked me to co-host this podcast, I remember thinking, this is completely a new territory for me, and I have never done anything like this before, so I had no clue where to start. If I mess up here and there, please forgive me.

I can review compliance framework all day, but podcasting, that's not quite my cup of tea yet. But honestly, this is such a great initiative and I think it's a great learning journey for us too. 

Absolutely. Actually, the idea is to have this podcast is to getting into the discussion on governance related matters.

How we can benefit ourself and our listeners to deep dive into current affairs and learn from the governance failure stories, understand and try to implement good governance practices for the long-term sustainability of the organization we work with. So that's bring us to today's topic of discussion.

Do you know the topic of our today's discussion? 

Well, I think you mentioned to me that we'll be talking about the evolution of governance. 

Exactly. I think this should be a great topic to kick off our first episode because to really understand governance as we know it today, we have to go to look back.

Where did the governance come from? How has it changed and is it still evolving, especially in the Canadian context? 

Absolutely. And if we want to understand what good governance look like today, we need to unpack its history. 

Yes. So let's start with what is the story behind the governance and what happened that we felt the need for governance in the corporates?

What is your perspectives of now? 

So when I think about the origins of governance, I don't start with codes or boardrooms. I just start with trust. Governance begin as a way for people to manage power, risk and responsibility. Long before the invention of modern corporations, you know, historically it emerged through merchant Gale's trading companies, royal charters.

But over the period of time, these informal norms evolved and were codified into law, especially under British common law, which introduced fundamental principle like loyalty, duty of care, and acting in good faith. These concepts became the basis of what we now call fiduciary duties. A core expectation that still shapes boardroom behavior today.

Canadian common law has also inherited this DNA, and you know, in Canada, you will find these duties reflected in legal framework like the Canada Business Corporation Act and other several provincials laws such as the Ontario Business Corporation Act. 

Yeah, that's great. But the question is how the corporate governance principles came into picture at the first point of time.

The story of corporate governance began from the rising scandal in the late 1980s after a wave of corporate scandals and public trust in business leadership was shaken. And in response in the uk, the London Stock Exchange created a committee to examine how companies were being run. And that led to the publication of the Cadbury Report in the year 1992, which is a document that for the first time.

Formally introduced the term corporate governance, and it also outlined a code of best practices covering everything from board responsibilities and financial oversight, which actually define separating the roles of chair and CEO and ensuring the director independence and also supporting the director education.

So it was actually the turning point, not just for the UK but globally. So the Bury report marked the shift. From informal expectation to structured governance code, and also in many ways, it laid the groundwork for everything that followed today. 

That's fascinating. In the late 20th century, we started seeing governance truly tested and failing globally.

Scandals like and Ron WorldCom, and here in Canada, pre-ex exposed weak boards, unchecked conflicts of interest and lack of oversight. These weren't just business failure. These were governance failure due to lack of best governance practices and disclosure requirement. These scandals were on the rise during the late nineties 

and Arvind

corporate governance scandals are not just a modern problem. One of the earliest and most infamous example goes back to the 18th century, like with the British East India Company, and there was another company also like South Sea Company. So the East India company was founded in 1600 under a royal charter, which giving it broad trading powers and limited liability for its investors.

It was quite revolutionary for the time, but by the late 17th century, it had become so powerful and corrupt that is essentially acting without any accountability. So there were massive failure in oversight, political interference, and financial abuse. Then. The British government had to step in and eventually nationalize the company through the Indian Act.

So that's one of the first real wake up calls in governance history. A reminder that no matter how powerful an organization becomes, oversight and integrity always matter. 

Yeah, actually, that's a powerful reminder for sure. But in Canada, our turning point came with the day report. The day report was published in 1994 by a committee of the Toronto Stock Exchange, chaired by Peter Day.

It was Canada's first major formal framework on corporate governance and was inspired by the UK category report from 1992. So by the early 1990s, corporate scandals were eroding investors'. Confidence in Canada. Boards were seen as a rubber stamp management decision. With little Challenges. Canada lacked a clear standard for what good governance looked like.

So Toronto Stock Exchange commissioned the day committee to recommend changes for listed companies that would promote transparency, accountability, and oversight. This report laid down recommendations regarding board independence, formal structure. Fiduciary responsibilities for companies listed on the Toronto Stock Exchange.

This report laid the foundation for the regulatory guideline from the Canadian Securities Administrator and CSA was formed, which is a body that coordinates provincial securities regulators introduced national policy for corporate governance guidelines and national instruments for disclosure of corporate governance practices.

So this brought in Canada's version of Comply or explain where public companies must disclose their governance practices or explain divisions similar to what UK have in their corporate governance code, right? 

Mm-hmm. Right. 

The idea that companies should either comply or explain Dad has been the heartbeat of Canadian governance ever seen.

Similarly, you can see like in us, they also responded with Sarbanes Oxley Act in 2002 after the Enron scandal, the most famous scandal, you know. So it introduced tough audit rules, whistleblower protections, and made executives more accountable. The act followed rule-based approach for corporate governance and compliance.

You know, it's also worth noting that governance doesn't operate in a vacuum. There is an international framework that Canada aligns with, for an example G 20 or OECD principles of corporate governance, which offers a global benchmark for what good governance practices are. And Canada doesn't just follow domestic standard.

It also play a role on the global governance stage. So as a founding member of the OECD and a participant in the G 20 Canada actually helped shape the G 20 and OECD principle of corporate governance, which also like set a global benchmark for boards, regulators, and investors. So these principles have a greatly influenced Canadian governance practice.

Well, corporate governance is not just for public companies, so it is also important to understand for other sectors too. Like nonprofit corporations and private companies. Back in the days, nonprofit in Canada didn't have much structure board. Were just expected like to meet elect directors and just file paperwork.

So this was just all about it. Yeah, 

you're correct. 

But you know, I mean, these days organizations started handling more public money and donor trust, especially in the nineties and two thousands. And things has changed. So both were expected to oversee strategy, manage their risk, and make sure they were accountable towards their donors and the public as well.

Mm-hmm. 

So that led to the major development in Canada, the enactment of corporations act for nonprofit in both federal and provincial jurisdictions. For an example, like Ontario, recently passed the Not-for-Profit Corporation Act in 2021. So these law modernized nonprofit governance, introducing clear rules around board duties and their financial oversight and member rights.

So today, a nonprofit internal bylaws alone are no longer enough because there is now a binding legal framework that sits above them. Nonprofit must ensure their governance practice are aligned, not just with the community expectations, but with the law itself. But of course, legislation alone is not enough to ensure effective governance oversight.

So as you know, we have seen in high profile cases like V charity scandal, public trust in nonprofit depends heavily on like strong and transparent governance. Though we don't have any formal codes and guidelines for governance framework for nonprofits and private corporations. Many nonprofit adopting Imagine Canada Standard program, which ensure best governance practice in their organization.

So the standard laid down by Imagine Canada is voluntary framework that promotes transparency, ethical fundraising, and board effectiveness. So it's really helped shape the mindset of board from we are just volunteers to, we are trustees of public trust. 

That's important. 

Yeah. But for private companies, corporates can follow and adopt governance guidelines like from the Institute of Corporate Directors or CPA Canada's Governance Guide.

Great insights, Ana. Speaking of the nonprofit, we still see a lot Robert's rule of order, so a lot of nonprofit in Canada still use them to run meeting, which is, which is not bad, like, which is fine, but. While they are useful for structure and fairness, specifically in member based organization, they're not idle for strategic governance.

Mm. Right. 

Robots rule come from the parliamentary tradition and they are very procedural. But today's governance require more dialogue, critical thinking, and flexibility. 

Absolutely. 

So if nonprofits wants to move from operational to strategic governance, the need to evolve beyond just Robert's rule.

Right, Arvind So speaking of strategic governance, I believe every organization, whether it's a public company or family owned business, a cooperative, or just a charity, so they all needs a governance framework that reflects their responsibilities and Arvind I think there is no one size fits for all with different types of company having different governance need.

So despite this, the underlying principle of good governance should be similar. 

So the question is what governance framework should include then? 

Well, governance framework should typically include a few key elements, as I believe, like the applicable laws and regulations and your articles of incorporations and bylaws.

Basically your fundamental documents, and you must have a clear board structure and clarity on the roles and responsibilities of each director and between directors and management. Core governance policy. For an example, conflict of interest policy, board evaluations, and their term limit, and most importantly, procedure for oversight, accountability, and transparency.

Yeah. Actually today, governance continues to evolve across all sectors. It doesn't matter. It is listed company, private or nonprofit or Crown Corporation Board are being asked to oversee. Climate and sustainability strategies, cybersecurity and data ethics, equity, diversity and inclusions. There are so many things like indigenous cancellations, long-term value creation, so on.

So these are no longer soft issues. They are central, the board agendas and investor expectation, and if we want to have a strong organization. Uh, healthier society. We need to keep evolving what governance means and how we live it. Absolute. And that's the beauty of governance. It never stands still. Each era redefines what good governance mean.

In one decade it was audit reform in another it, social inclusion, and now it's about sustainability, value-based leadership, even culture at the board table. At its core, governance is still about that original idea. You know, how do we ensure decisions are made responsibly fairly and in the best interest of those impacted?

And if we want to build stronger organization and have their institution, we need to keep evolving what governance means and how we practice it. This was such a thoughtful way to kick off our first episode of Governance 360 and Sapna thank you. And thanks to all of you for listening. If you found value in today's conversation, follow us on Governance 360 on LinkedIn, and subscribe on Spotify, apple Podcast and wherever you'll listen.

And in our upcoming episode, we will explore real governance stories from boardroom controversies to evolving frameworks and everything in between. So listeners, if you have got a questions or a story about governance in your world, just reach out to us. We just might include it in our future episode. 

Until next time, stay curious, stay accountable, and keep a governance 360 going.