CORPORATE governance is a relative latecomer to the Web. The first real corporate governance sections only emerged when watershed corporate fraud events in the US in 2002 prompted regulators and lawmakers to pass a slew of new rules.

Before that, corporate websites almost never included corporate governance information outside of mandatory annual disclosures in drab proxy statements. Indeed, it was common to see sections labeled corporate governance containing no more than a list of management and directors with little or no biographical information.

Most companies have quickly had to come to grips with the new regimen of corporate governance reporting. Unfortunately, the haste with which companies have responded to new rules has resulted in some poor decisions and practices that don't meet the information and website usability needs of investors. This in turn compromises the company's effectiveness in communicating its essential information, and can lead to website users forming negative impressions of the company.

In our recent study of online corporate governance disclosure, we found vast differences in the quality and completeness of corporate governance sections on the Web. A key distinguishing factor of best practice governance sections is that information is kept up-to-date and the board of directors appears actively engaged in its responsibilities. This underscores again the fact that unless there is a strong commitment to good governance and good disclosure, companies have little chance of being believable in their governance communications.