Leadership and Governance - missing link?

I find it interesting that there appears to be a disconnect between Leadership and Governance. Board members are responsible for governance or the lack thereof, with the elements of governance being delegated down to total ineffectiveness. In effect, governance is being "managed" with no real accountability by the board.

If you bring leadership into the equation, you will agree that it doesn't fit at all!! So why is this? Surely strong leadership should be the cornerstone of good governance?

Historically, weak and ineffective leadership results in the abuse of power and lack of governance. You can witness this in failing economies and companies going under. So where does leadership extend to? Just the Board? I think not. While it is right that the CEO and directors display and practice good leadership, surely shareholders and stakeholders also carry some responsibility?

In all the times where there has been economic crisis's, where were the shareholders? Its OK to reap the profits while the going is good, but you can't tell me that shareholders are oblivious and naive that they do not suspect dirty dealings, especially with the woppers we have been subjected to recently. Its convenient to look the other way!

Perhaps company law should be rewritten to include shareholders or those who manage indirect shareholders money e.g. pension funds etc, in joint responsibility (and liability) for good governance and therefore corporate failure.

Imagine in the current crisis that instead of the State paying out taxpayers funds to prop up companies fraught with mis-management and poor governance, the shareholders were requested to payback all the dividends earned as a result of these actions.

We would see an exponential improvement in good governance, and an active improvement in good leadership. After all, if you as a shareholder were held jointly responsibile for mismanagement, you'd make damn sure that you have the best leadership in place.