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Why do regulation and public policy and legislative efforts too often fail to do their intended job?

For some time, I’ve argued that one reason is that the inputs are flawed and that there needs to be more inclusiveness in the decision making pool for legislation and regulatory initiatives.

In this article for Fortune I discussed the issue in a particular case related to control frameworks in the Sarbanes-Oxley implementation. http://money.cnn.com/2010/07/16/news/economy/COSO_SEC_flaws_Sarbox.fortune/

I have also written directly to the regulators at the FDIC and SEC about my concerns in this arena, encouraging them to draw in and expand the pool of resources they consult with — in order to combat regulatory capture and make better regulations.

Legislators need to do this also. When I attended a meeting at the Academy of Sciences a few years ago, a congresswomen told the green energy industry members in attendance there that if they hoped to succeed they would need to hire more lobbyists. Clearly, that is the antithesis of a free and open democracy.

In my letters to the regulators I have recommended making greater use of independent experts to supplement industry lobbying. I was pleased therefore to run across this recent working paper on regulatory capture by Professor Lawrence Baxter whcih advocates these ideas.  http://scholarship.law.duke.edu/faculty_scholarship/2355/

The issue of how laws and rules are made is not a small issue and it should be of interest to everyone. Let’s hope when Baxter’s work is published, it will make a difference in encouraging more inclusiveness and as a result better legislation and regulation for all.

The Value Alliance and Corporate Governance Alliance www.thevaluealliance.com

Eleanor Bloxham www.eleanorbloxham.com

Copyright 2010 The Value Alliance Company. All rights reserved.

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Corporate Valuation is a topic of importance to not only shareholders but all stakeholders: managers, employees, creditors, communities, customers and suppliers, etc.

Jim McRitchie, publisher of corpgov.net, recently reviewed Alex Lajoux and Bob Monks’ new book on Corporate Valuation which should be in your library if valuation topics matter to you (and they should).

Please see Jim’s excellent post and review here: http://corpgov.net/?tag=valuation

The book Corporate Valuation provides a view on all the major methodologies of valuation. Here’s a link to Monks and Lajoux’s book if you don’t have it: http://www.amazon.com/Corporate-Valuation-Portfolio-Investment-Governance/dp/1576603172/ref=sr_1_1?ie=UTF8&s=books&qid=1304871947&sr=1-1

One of the surprises for Jim in the book was to find that I was credited with the development of one of the valuation methodologies featured in the book, a relatively new valuation methodology (which I wrote about and documented in the book Economic Value Management published in 2002 http://www.amazon.com/exec/obidos/ASIN/0471354260/thevalueallia-20).

In case you are also unfamiliar with my work in this area, the valuation methodology I developed  takes into account the two-way value exchanges between the corporation and all its stakeholders as well as the valuation of the separate entities themselves, something I describe as the three-way mirror.

My methodology can be used by anyone and all stakeholders because unlike other approaches, it is much more comprehenisive in its thinking – and provides a toolset for a variety of stakeholders to assess the corporation from their own and multiple perspectives.

The methodology and approach go into enough detail that it can be especially useful for managers who already are close to the issues but need a framework to ensure they aren’t ignoring very important, relevant factors in the valuation process.

Recently I wrote for the inaugural edition of the Journal of Sustainable Finance (a peer reviewed journal) showing how the valuaton approach I had developed early in the last decade was essential for approaching corporate sustainability in a comprehensive and holistic way.  http://www.ingentaconnect.com/content/earthscan/jsfi/2011/00000001/00000001/art00007;jsessionid=5d3nlijhk67dq.alice

Historically speaking, Alex Lajoux and Bob Monk’s reference to my work in their book on Corporate Valuation highlights the fact that my work pre-dates more recent shared value concepts and provides greater depth in laying out a specific valuation framework. Of course, I am very grateful  to Lajoux and Monks for recognizing my work in modeling the corporation and valuation in this way.

If you haven’t yet read it, I know the book Corporate Valuation http://www.amazon.com/Corporate-Valuation-Portfolio-Investment-Governance/dp/1576603172/ref=sr_1_1?ie=UTF8&s=books&qid=1304871947&sr=1-1 will surprise you as it did Jim in numerous ways – with information on valuation approaches, insights and methodologies with which you may not yet be familiar.

Certainly, it will get you to rethink what you may have thought you knew on this very important topic.

The Value Alliance and Corporate Governance Alliance www.thevaluealliance.com

Eleanor Bloxham www.eleanorbloxham.com

Copyright 2010 The Value Alliance Company. All rights reserved.