The Effects of Regulatory Responses to the Recent Corporate Failures
Working Title: * The Effects of Regulatory Responses to the Recent Corporate Failures
Aim:
I. To consider if the responses to the recent corporate failures are yielding the desired results.
Background:
1. The development of Bretton Woods and Glass Steagull Agreements were in response to post WWII financial crisis. 2. The Cadbury Report came about as response the financial crisis of the 90s. 3. Following the Cadbury Report was the Greenbury Report which was advanced to curb the then prevalent management and executive misbehaviour. 4. The Cadbury and Greenbury Reports eventually evolved into what is known today as the Comply or Explain Code in the UK. 5. The Banking Act 2006 (UK), FSMA (UK) Sarbanes-Oxley Act (US) and Dodd-Frank Act (US) are also legislative reactions to present Financial Crisis. 6. Currently, the FSA is undergoing restructuring and/ or reorganisation due to its shortcomings in handling the present financial crisis.
Literature Review
Various corporate governance procedures have evolved over the years to manage financial crisis and respond to corporate misbehaviours; starting from the Glass-Steagall and Bretton Woods agreements which were developed to deliver a stable economy after the World War II to the Cadbury and Greenbury reports, both of which gave birth to the Combined Code. Infact, the passage of the Sarbanes-Oxley Act in the US was accelerated to curb the prevalent financial crisis and management impropriety which became even more apparent with the failure of Enron and Worldcom
Yet in managing the financial crisis, these corporate governance procedures suffer massive setbacks and serious inadequacies; the Sarbanes-Oxley Act, for example, is generating an outcry for being too expensive to comply with and that is without prejudice to the view that it stifles the improvement of the capital market. Similarly, the FSA has been largely blamed for the recent regulatory shortcomings in the UK and it is
Aim:
I. To consider if the responses to the recent corporate failures are yielding the desired results.
Background:
1. The development of Bretton Woods and Glass Steagull Agreements were in response to post WWII financial crisis. 2. The Cadbury Report came about as response the financial crisis of the 90s. 3. Following the Cadbury Report was the Greenbury Report which was advanced to curb the then prevalent management and executive misbehaviour. 4. The Cadbury and Greenbury Reports eventually evolved into what is known today as the Comply or Explain Code in the UK. 5. The Banking Act 2006 (UK), FSMA (UK) Sarbanes-Oxley Act (US) and Dodd-Frank Act (US) are also legislative reactions to present Financial Crisis. 6. Currently, the FSA is undergoing restructuring and/ or reorganisation due to its shortcomings in handling the present financial crisis.
Literature Review
Various corporate governance procedures have evolved over the years to manage financial crisis and respond to corporate misbehaviours; starting from the Glass-Steagall and Bretton Woods agreements which were developed to deliver a stable economy after the World War II to the Cadbury and Greenbury reports, both of which gave birth to the Combined Code. Infact, the passage of the Sarbanes-Oxley Act in the US was accelerated to curb the prevalent financial crisis and management impropriety which became even more apparent with the failure of Enron and Worldcom
Yet in managing the financial crisis, these corporate governance procedures suffer massive setbacks and serious inadequacies; the Sarbanes-Oxley Act, for example, is generating an outcry for being too expensive to comply with and that is without prejudice to the view that it stifles the improvement of the capital market. Similarly, the FSA has been largely blamed for the recent regulatory shortcomings in the UK and it is