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The Role of Government in Corporate Governance
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Recent corporate scandals have led to public pressure to reform business practices and increase regulation. Of course, dishonesty, greed, and cover-ups are not new societal concerns. Indeed, much of the existing system of corporate regulation in the United States emerged in response to vagaries of the late 1920s and the subsequent stock market crash. What has changed in recent years, though, is the frequency and public salience of corporate scandals. As a measure of public attention, consider that, in 1998, The Economist published no editorials devoted to corporate governance issues. By 2002, it published twenty of them, followed by twenty more in 2003 and more still in 2004.
The public outcry over the recent scandals has made it clear that the status quo is no longer acceptable: the public is demand- ing accountability and responsibility in corporate behavior. It is widely believed that it will take more than just leadership by the corporate sector to restore public confidence in our capital mar- kets and ensure their ongoing vitality. It will also take effective government action, in the form of reformed regulatory systems, improved auditing, and stepped up law enforcement.
Already policymakers have adopted numerous reforms. In 2002, Congress speedily passed the Sarbanes-Oxley Act, imposing (among other things) new financial control and report- ing requirements on publicly traded companies.The Securities and Exchange Commission (SEC) and the self-regulatory organ- izations it oversees
1st Edtion
NONE
The Role of Government in Corporate Governance
Management
English
2014
1-128
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