Corporate Governance in UK an EU

Table of Contents

TOC \o "1-3 " \h \z \u HYPERLINK \l "_Toc0 " Section IV US Corporate Scandals and Sarbanes - Oxley Act 2002 PAGEREF _Toc0 \h 2

HYPERLINK \l "_Toc1 " IV .1 .0 Introduction PAGEREF _Toc1 \h 2

HYPERLINK \l "_Toc2 " IV .2 .0 Corporate Governance Legislation in the United States PAGEREF _Toc2 \h 2

HYPERLINK \l "_Toc3 " IV .2 .1 US Perspective on Corporate Governance Measures PAGEREF _Toc3 \h 4

HYPERLINK \l "_Toc4 " IV .2 .2 Development of Corporate Governance in the United States PAGEREF _Toc4 \h 5 p

HYPERLINK \l "_Toc5 " IV .3 US Corporate Scandals PAGEREF _Toc5 \h 8

HYPERLINK \l "_Toc6 " IV .3 .1 Events Leading to the Bankruptcy of Enron PAGEREF _Toc6 \h 8

HYPERLINK \l "_Toc7 " IV .3 .2 Corporate Scandals - Difference in the US and European Contexts PAGEREF _Toc7 \h 11

HYPERLINK \l "_Toc8 " IV .4 .0 Sarbanes-Oxley Act PAGEREF _Toc8 \h 12

HYPERLINK \l "_Toc9 " IV .4 .1 . Purposes of the Sarbanes-Oxley Act PAGEREF _Toc9 \h 13

HYPERLINK \l "_Toc0 " IV .4 .2 After-effects of the Act PAGEREF _Toc0 \h 15

HYPERLINK \l "_Toc1 " IV .4 .3 Effects of Passing of the Sarbanes - Oxley Act on Executive Compensation PAGEREF _Toc1 \h 17

HYPERLINK \l "_Toc2 " IV .4 .4 Alternative Forms of Executive Compensation PAGEREF _Toc2 \h 19

HYPERLINK \l "_Toc3 " IV .5 .0 Public Company Accounting Oversight Board PAGEREF _Toc3 \h 19

HYPERLINK \l "_Toc4 " IV .5 .1 Corporate Governance and the Structure of the Board of Directors PAGEREF _Toc4 \h 20

HYPERLINK \l "_Toc5 " IV .5 .2 Corporate Governance and the Duties of Directors in the US Context PAGEREF _Toc5 \h 21

HYPERLINK \l "_Toc6 " IV . 5 .3 Corporate Governance and Audit Committees in the US Context PAGEREF _Toc6 \h 23

HYPERLINK \l "_Toc7 " IV .5 .4 Role of Accounting in Corporate Governance PAGEREF _Toc7 \h 24

HYPERLINK \l "_Toc8 " IV .6 .0 Corporate Governance and Transparency PAGEREF _Toc8 \h 28

HYPERLINK \l "_Toc9 " IV .7 .0 Other corporate Governance Concerns PAGEREF _Toc9 \h 29

HYPERLINK \l "_Toc0 " IV .7 .1 the Legal Origin of Corporate Governance PAGEREF _Toc0 \h 30

HYPERLINK \l "_Toc1 " IV .7 .2 Necessity for International Standards of Corporate Governance PAGEREF _Toc1 \h 32

HYPERLINK \l "_Toc2 " IV .8 .0 Conclusion PAGEREF _Toc2 \h 33

HYPERLINK \l "_Toc3 " Bibliography PAGEREF _Toc3 \h 34 Section IV US Corporate Scandals and Sarbanes - Oxley Act 2002

IV .1 .0 Introduction

There are two approaches to the corporate governance framework . The first is a market driven model which comprises self-regulation that operates independently of state intervention . This model operates on public pressure such as compulsion by institutions such as stock exchanges and institutional investors who prescribe certain norms and conditions of good governance where corporate entities have no choice except to follow them . The second model evolves from the intervention of the state and is characterized by legislative requirements , especially with respect to disclosures , by way of prescription rather than being based on suggestion or principles . The latest legislative developments in countries like...