By Foluke Akinmoladun
Corporate governance in shipping can also be seen in practice under the following situations:
1. Accountable Leadership
Accountable leadership means that executives and board members are responsible for the decisions they make and the outcomes of those decisions. In shipping, this includes strategic choices like investing in new vessels, selecting fuel types to meet environmental regulations, negotiating alliances, and setting safety and labour policies.
Why It Matters in Shipping:
● Shipping companies operate in complex international environments where decisions affect not just profits, but safety, compliance, and environmental impact.
● Accountability ensures that leaders do not act in self‑interest (e.g., cutting corners to reduce costs) but instead make decisions that protect shareholder value and stakeholder trust.
Example in Practice:
AP Moller‑Maersk showed accountable leadership through its governance disclosures. The company’s board of directors regularly publishes detailed reports explaining strategic decisions such as its shift toward low‑carbon fuels and how these align with stakeholder expectations for sustainability.(see Maersk. Corporate Governance. : [https://www.maersk.com/about/corporate-governance – last visited at 11:05pm WAT on 22nd March 2026).
Similarly, when Hapag‑Lloyd expanded its fleet with eco‑efficient vessels, the executive leadership publicly explained how this investment supports long‑term competitiveness and regulatory compliance (e.g., with IMO emission standards)(See- . Hapag-Lloyd. Corporate Governance and ESG Reporting – https://www.hapag-lloyd.com/en/investor-relations/corporate-governance]- Last visited on the 21st of March by 10:16pm WAT) . This level of transparency helps stakeholders understand not only what decisions are made but why they were made.
2. Efficiency and Effectiveness
Governance requires organisations to optimize how they use resources whether financial, human, technological, or operational to achieve strategic objectives with the least waste and highest possible result.
Why It Matters in Shipping:
Shipping operates on very tight margins and faces high operating costs (fuel, crew, maintenance, port fees). Efficiency isn’t just a competitive advantage, it’s a survival necessity.
Examples in the Industry:
● Fleet Optimization: Many carriers use sophisticated fleet management software to schedule vessels and reduce idle time in port, which improves fuel efficiency and delivery reliability.
● Collaborative Alliances: Shipping alliances like THE Alliance and 2M are governance‑driven efforts to share vessel space and optimize routes, reducing duplicate sailings and overall sector carbon emissions. These alliances require tight governance structures to coordinate pricing, schedules, and shared assets across member companies.
● A shipowner who efficiently deploys vessels and optimizes routes also strengthens the company’s operational effectiveness, contributing to cost savings, stronger delivery reliability, and better investor perceptions.
3. Integrity and Ethical Conduct
Integrity refers to acting honestly, transparently, and in accordance with ethical principles even when doing so may be challenging or less profitable in the short term.
Why It Matters in Shipping:
Shipping impacts many stakeholders beyond shareholders, from seafarers and dock workers to communities near busy ports and the global environment. Ethical lapses in safety, bribery, or reporting can deeply damage trust and business viability.
Examples in the Industry:
Safety Reporting: A maritime company that honestly reports near‑miss incidents or safety lapses, rather than hiding them, demonstrates integrity. For instance, companies that publish annual safety data show transparency in performance issues and corrective actions.
Anti‑Corruption: Port operations around the world are sometimes exposed to bribery and corruption. Shipping companies with strong ethical codes enforce strict anti‑bribery policies, conduct regular ethics training, and audit compliance, thus protecting both reputation and legal standing.
For example, a company that implements digital documentation to prevent falsified bills of lading or shipping manifests is embedding ethical conduct into its operational DNA.
4. Responsibility
Responsibility in governance means that leaders think beyond immediate profits and consider the broader social, environmental, and economic impacts of their decisions.
Why It Matters in Shipping:
Shipping has historically been associated with air emissions, marine pollution, labour challenges, and complex supply chain responsibilities. Leaders must balance profitability with societal expectations, legal compliance, and environmental stewardship.
Examples in the Industry:
● Environmental Responsibility: Many shipping companies now integrate decarbonization commitments into board‑level strategy. For instance, carriers often set measurable emission reduction targets and report progress publicly.
● Crew Welfare: Responsible governance includes policies that protect seafarer welfare, such as ensuring appropriate rest periods, access to medical care, and fair treatment. Organizations like the International Labour Organization (ILO) influence how shipping companies build welfare standards into governance frameworks.
Shipping companies that embrace responsibility make strategic decisions that align with global environmental goals, community expectations, and international labour standards.
Accountability Theories in Corporate Governance
Accountability isn’t just a buzzword, it is grounded in two complementary theories that explain why governance functions the way it does:
Stewardship Theory
Stewardship theory assumes that leaders are naturally inclined to act in the best interests of the organization and its stakeholders. Under this view, executives are seen as custodians of company resources and values, not just profit machines.
Implications for Shipping:
● Leaders are trusted to make ethical decisions aligned with long‑term sustainability rather than short‑term gains.
● Stewardship encourages collaboration, ethical conduct, and value creation for both shareholders and society.
Industry Example:
A shipping firm that reinvests profits into cleaner engine technology because it believes in environmental stewardship (even if it reduces short‑term earnings) reflects stewardship theory. It aligns leadership behaviour with broader goals beyond immediate financial gain.
