Corporate governance failures behind downturn, Spitzer tells Harvard

A failure of corporate governance was one of the major causes of the economic downturn, the former New York governor Eliot Spitzer has stated.

Lecturing at Harvard University, he argued that, rather than tougher laws from on-top, executives need to assume responsibility for ensuring transparency in the markets, while regulators need to make more effective use of the powers already at their disposal to ensure integrity in the global markets.

However, he conceded that corporate governance left to itself may not address core values such as workplace discrimination and minimum wage enforcement, with the events of recent months indicating that, without pressure from regulators or their own shareholders, top executives can often make poor calls.

"When the choice had to be made between integrity and market share, integrity and profits, they made the wrong choice," Spitzer, who is a Harvard Law School graduate, told those attending the lecture with reference to the banking crisis.

In his position first as an attorney general and then as the governor of New York, Spitzer was noted for his determination to expose and punish wrongdoings by major financial companies, partly through using internal emails to expose the pushing of poor stocks.