The issues that have surfaced in the media recently concerning certain listed companies should not be viewed as isolated incidents or mere technical violations. Regardless of their specific details, these issues raise a deeper question about the state of corporate governance in the local environment, and about the extent to which boards of directors and their specialized committees are capable of fulfilling their true role in oversight, accountability, and protecting shareholder rights, especially those of small investors.

Financial markets are not built on numbers alone; they are built, first and foremost, on trust. And trust is not established merely by the existence of regulations, rules, and annual reports; rather, it is built when the investor feels that the financial statements reflect reality, that the board of directors exercises its role with independence, that the audit committee is not merely a formalistic committee, and that disclosure is not used to beautify the image but to enable investors to make their decisions based on fair and reliable information.

What some cases involving listed companies reveal should not be read solely from an accounting perspective. Accounting here may be only the visible symptom of a deeper problem. When a violation reaches the level of inflating revenues, presenting financial statements that do not reflect their true state, or providing a financial picture that does not represent the company's economic reality, the question is no longer: Where was the accountant? Rather: Where was the board of directors? Where was the audit committee? Where was independence? And where was the institutional culture that is supposed to make financial statements a document of accountability rather than a tool for embellishment?

These questions represent the essence of governance. Governance is not merely regulatory texts, periodic disclosures, or forming committees within the board just to meet requirements. Governance in its true sense is the company's ability to discipline itself from within before the regulatory authority intervenes from without. It is the board's ability to hold executive management accountable, to reject the passage of ungoverned decisions, and to protect the interests of the company and shareholders even when that is uncomfortable or contrary to the wishes of some influential parties.

Hence the importance of distinguishing between formal governance and actual governance. A company may have an audit committee, written policies, published disclosures, and members classified as independent, yet governance may not truly be present. Real independence is not measured by what is written in forms, but by what the member practices when facing sensitive decisions. Independence does not appear in ordinary meetings; it appears when the member requests additional information, objects to an accounting treatment, demands an independent report, or refuses to pass a decision that could harm shareholders or mislead the market.

Here emerges one of the deep-rooted problems in some companies that have transitioned from private or family ownership to a listed company structure. A listed company is not a private extension of the founding owners or major shareholders; rather, it is a public economic entity in which the funds of various investor segments participate. With listing, the nature of responsibility changes. The company is no longer managed solely according to the logic of personal trust, historical relationships, or family arrangements, but must be managed according to the rules of transparency, accountability, independence, and protection of the rights of all shareholders.

This does not mean generalizing about family companies or diminishing their role in the national economy. Family companies are an important pillar of development, and many have achieved great successes and contributed to job creation and building influential economic sectors. But the problem begins when a company moves to the financial market without its administrative culture transitioning from the logic of private ownership to the logic of public responsibility. Then a dangerous gap appears between the regulatory form of a listed company and the administrative mindset that still operates with the logic of relationships, loyalty, and personal trust.

Appointing board members based on personal relationships, family balances, or social favors is one of the most dangerous entry points for weak governance. The board of directors is not a prestige council, nor a space for honoring names, nor a closed circle of associates. The board of directors is the first line of defense for the company, shareholders, and the market. If diversity in experience, independence of opinion, financial acumen, and courage in accountability are absent, the board transforms from a supervisory tool into a formal cover for the decisions of management or major influencers.

This becomes even more dangerous when the audit committee is weak or unable to exercise its role effectively. This committee in particular is one of the most important components of governance, because it stands at the intersection of financial management, external audit, internal audit, risk management, and disclosure. If the audit committee lacks sufficient expertise, does not enjoy actual independence, does not ask difficult questions, or merely receives presentations and reports without analysis and discussion, it turns into a formal procedure that does not provide the required protection.

Here, the damage is not confined within the company. Weak governance in one listed company can harm investor confidence in an entire sector, and possibly in the whole market. The small investor usually does not have the ability to access internal information, nor can they test the quality of revenues, the integrity of accounting estimates, or the strength of internal control systems. They rely on financial statements, the board's report, the external auditor's report, and market disclosures. If these tools weaken, the small investor becomes the party most exposed to harm.

Academic and governance specialist