Board structure and corporate governance are regulated and legislated at the exchanges and the state level. Laws and regulations can be passed which give shareholders more power to shareholders to control boards. The Scandinavian countries do this very well. There are several pro-shareholder initiatives in front of Congress and the SEC right now, and executives are fighting it tooth and nail because it removes power - and thus their power to effect their own compensation - away from them to shareholders.
That doesn't mean we wouldn't have an oil spill like we had in the Gulf. Sometimes shareholders' interests are at odds with the interests of the nation at large. I'm merely trying to disabuse the notion that companies will always act to maintain their reputation.
I'm aware of legislation that has been in place for board structures, trading regulations, etc. I was speaking specifically to the point of execs acting out of personal interest. Legislation in favor of more shareholder Rights is obviously a step in a better direction but is it the best direction? How can it be restructured to remove consolidated power to effectively negate the current de facto plutocracy without encroaching Communism?
As for companies always acting out of PR reasons...who the hell would buy that? Many corporations, including the Catholic church, have been operating above the law for decades. I fear some suspect if a large business is still legally in business that it must be proof they have complied with the law.