Corporate Governance

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Corporate governance refers to the administration, internal oversight, and executive actions of a corporation. In the wake of accounting scandals in 2000 and 2001, at companies such as Enron, Tyco, and WorldCom, governance became a major regulatory issue. In 2002, the U.S. Congress passed the Public Company Accounting Reform and Investor Protection Act of 2002 (Sarbanes-Oxley Act), which established and enhanced governance standards in corporate boards, management and accounting firms.[1]

Subsequent to thefinancial crisis of 2007-08, corporate governance re-emerged. Lax risk management, oversight, and accounting standards among financial entities have been blamed for the near-collapse of the financial system.[2]

Since 2008, regulatory bodies around the world have proposed and begun to implement changes in the governance structure of financial entities, including:


References

  1. Sarbanes-Oxley Act of 2002. SEC.
  2. The Corporate Governance Lessons from the Financial Crisis. OECD.
  3. U.K. Shakes Up Bank Regulation. The Wall Street Journal.