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Is corporate governance a modern fantasy? Abstract What is the difference between the collapse of Enron and the recent collapse of the banking sector? Well, the obvious answer is that Enron's demise was not as significant. Yet, in the wake of Enron’s collapse, the Sarbanes-Oxley Act was rushed into law in the USA in order to cure the perceived corporate ills of, and give back credibility to, corporate America. Organizations around the world have since spent thousands of hours becoming Sarbanes-Oxley compliant in order to be able to continue trading with companies in the USA. At the centre of Sarbanes-Oxley was its focus on strengthening corporate governance procedures to prevent fraud and mismanagement - but the chaos in the banking sector must raise a question over the success of Sarbanes-Oxley, and more significantly, over the whole idea of corporate governance. This paper was published in International Accountant, April/May 2010, pp.16-17, reprinted in Governance, September 2010 See full article » |