Corporate Governance: Codification or Self-Regulation?

Is SOX a Viable Solution for New Zealand?

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Author: Lars Haverkamp

Publisher: GRIN Verlag

ISBN: 3638861422

Category: Law

Page: 71

View: 9115

Master's Thesis from the year 2006 in the subject Law - Comparative Legal Systems, Comparative Law, grade: B+, University of Canterbury (Law School), 93 entries in the bibliography, language: English, abstract: The stock market has gained extraordinary significance over recent years. Large proportions of society invest in equity markets in order to save for their retirement. Various bodies exist to fight abuses by executives of publicly owned companies. Parliament has created the New Zealand Securities Commission (SEC), an independent Crown entity in terms of the Crown Entities Act 2004, to fight ‘white collar fraud’ and the abuse of business ethics and the law. Numerous scandals worldwide but especially the Enron case in the United States of America (USA) at the beginning of this decade shocked investors and led to a decrease in shareholder confidence. Investors lost their trust in corporate governance techniques and the credibility of managements. In the 1930s, in the aftermath of the 1929 stock exchange crash in the USA, Berle and Means ascertained the underlying problem of corporate governance as the separation of ownership and power. In accordance with Adam Smith, they explained that, as a basic human trait, executives never apply the same diligence when running a company as the owner of the same company might apply. This fundamental understanding is the reason for the necessity of corporate governance rules. As a pro-tection of shareholder interests, the interests of the owners of the company, the regulator tries to set standards which create investor confidence and security. By now the large majority of nations have implemented some form of corporate gov-ernance regime. The US government has tried to counter fraud and investor scepticism by adopting a statutory corporate governance code called the Sarbanes-Oxley Act 2002 (SOX). New Zealand, on the other hand, opted for a more voluntary ap-proach to governance regulation based on principles rather than legal norms, which impose no legal obligation on affected parties. Farrar disapproves of his approach and calls New Zealand’s principles “bland provisions”. He fears a decrease of investments in the New Zealand market if it does not follow the US lead quickly. This paper tries to evaluate Farrar’s proposal of imitating the US example. Section II portrays corporate governance regulations currently in place in New Zealand. It focuses predominantly on listed public companies and shows shortfalls in this area. Section III illuminates SOX and its provisions. The paper provides explanations ma-jor fraud scandals in the USA and discusses in the light of these findings the effectuality of SOX. It concludes that the US legislation has numerous pitfalls and fails to achieve necessary fraud prevention. Based on this understanding, Section IV discusses the advantages and disadvantages of a principle-based approach to corporate governance regulation. It is shown how selfregulation paired with a strong legal framework provides sufficient protection for investors and how such an approach values the theory of free markets. This author believes strongly in the efficiency of free, unregulated markets and eventually concludes with a few humble suggestions on how New Zealand might change their corporate governance regime.

Corporate Governance

Codification Or Self-Regulation?

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Author: Lars Haverkamp

Publisher: GRIN Verlag

ISBN: 3640462696

Category:

Page: 80

View: 4902

Master's Thesis from the year 2006 in the subject Law - Comparative Legal Systems, Comparative Law, grade: B+, University of Canterbury (Law School), 93 entries in the bibliography, language: English, comment: The paper deals with the pros and cons of the US Sarbanes Oxley Act and its adaptability to the New Zealand legal system. The author looks specifically at the two predominant systems of implementing corporate governance codes: the US approach of codification and the rather European based approach of self-regulation. The paper concludes with a recommendation for New Zealand's highly unique market system., abstract: The stock market has gained extraordinary significance over recent years. Large proportions of society invest in equity markets in order to save for their retirement. Various bodies exist to fight abuses by executives of publicly owned companies. Parliament has created the New Zealand Securities Commission (SEC), an independent Crown entity in terms of the Crown Entities Act 2004, to fight 'white collar fraud' and the abuse of business ethics and the law. Numerous scandals worldwide but especially the Enron case in the United States of America (USA) at the beginning of this decade shocked investors and led to a decrease in shareholder confidence. Investors lost their trust in corporate governance techniques and the credibility of managements. In the 1930s, in the aftermath of the 1929 stock exchange crash in the USA, Berle and Means ascertained the underlying problem of corporate governance as the separation of ownership and power. In accordance with Adam Smith, they explained that, as a basic human trait, executives never apply the same diligence when running a company as the owner of the same company might apply. This fundamental understanding is the reason for the necessity of corporate governance rules. As a pro-tection of shareholder interests, the interests of the owners of the company, the regulator tries to set standards which creat

Corporate Governance -Self Regulation Vs Legislation -A Case Study

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Author: Debabrata Chatterjee

Publisher: LAP Lambert Academic Publishing

ISBN: 9783848424115

Category:

Page: 84

View: 3789

The importance of codification of good Corporate Governance practices having mandatory force cannot be mitigated. But in order to ensure implementation and compliance in true spirit, Corporate Governance practices need to be legislated by one regulator or body only to avert duplicity, confusion and uncertainty. The necessity of mandatory Corporate Governance practices, however, leads to another significant question is mere compliance of legislated Corporate Governance practices an ideal situation. The compliance with legislated Corporate Governance practices must be considered as Corporate Governance practices must be considered as Corporate Governance practices at minimum level. It, therefore, cannot be an ideal situation. What is desired, now, is change in perception of persons charged with governance. It is for the corporate world to set up precedents of implementing unique and distinctive Corporate Governance practices as a leader to be followed by everyone. The regulatory pressure is indispensable but voluntary compliance to more than minimum is desirable.

Corporate Governance and Directors' Independence

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Author: Yuan Zhao

Publisher: Kluwer Law International B.V.

ISBN: 9041136045

Category: Business & Economics

Page: 223

View: 673

More and more, the agenda of corporate governance reform has been calling for a dramatic change in the composition and structure of boards of publicly traded companies, with particular criticism reserved for the role of independent directors. This timely, ground-breaking book takes a new and rigorous approach to this important issue. Investigating board independence from a distinctly original perspective, the author's systematic analysis explores the effective interaction of such aspects as the following: What specific functions are expected of independent directors? How these functions fit with the unitary board structure? Why independent directors are seen as inherently necessary for corporate governance? Whether board independence can be compatible with other governance mechanisms? How mainstream company law is applied to independent directors. The analysis leads to a series of solutions designed to eliminate the real and perceived obstacles to the proper functioning of independent directors. In the process, the author discusses such critical 'moments' in corporate governance as monitoring, public relations, social responsibility, shareholder activism, the danger of 'groupthink', remuneration, collective liability, and codes of conduct. The discussion and analysis chart a course through which independent directors can better serve the goal of improving the system of corporate governance. As such, it will be greatly appreciated by investors, corporate counsel for institutional investors, and policymakers and academics in relevant areas of both business and law.

Corporate Governance

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Author: Saleem Sheikh,Rees

Publisher: Cavendish Publishing

ISBN: 1843142619

Category: Business & Economics

Page: 236

View: 8159

This book critically considers the relationship between directors, shareholders and auditors in the corporate governance system. Traditionally, company law has been primarily based on this tripartite relationship. This book comprises a series of contributions from authors who argue that there are wider interests which British company law has largely ignored. These include the interests of creditors, employees, consumers, suppliers and the general public. The concept of corporate governance is examined with comparative references to the USA and Canada. Particular reference is made to the Cadbury Committee and its implications for future company law reform. The ethical and sociological dimensions of corporate governance is also fully discussed

Corporate Governance in Action

Regulators, Market Actors and Scrutinizers

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Author: Lars Engwall

Publisher: Routledge

ISBN: 1351977288

Category: Business & Economics

Page: 204

View: 5276

Over time we have seen large corporations, in many cases with multinational operations, begin to play an increasingly significant role in modern society. This in turn has put the governance of these corporations into focus. Against this background, Corporate Governance in Action helps provide a framework for examining corporate governance through a focus provided by external pressures on large corporations. It also brings together the approach of economics and finance with theories in organization studies, such as aspects of resource dependency theory. This framework takes into consideration not only the market relations of modern corporations but also their dependence on regulators and different kind of scrutinizers. This thoughtful book is a complete research guide that provides a new understanding and applicable framework for advanced students, academics and researchers in the area of corporate governance and the related disciplines.

Corporate Governance Flexibility and Proportionality in Corporate Governance

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Author: OECD

Publisher: OECD Publishing

ISBN: 9264307494

Category:

Page: 236

View: 8102

This report provides an assessment of the flexibility and proportionality arrangements available within corporate governance frameworks that relate to seven areas of regulation: pre-emptive rights; board composition, board committees and board member qualifications; say on pay and the detail of ...

Regulated Self-regulation as a Form of Modern Government

An Analysis of Case Studies from Media and Telecommunications Law

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Author: Wolfgang Schulz,Thorsten Held

Publisher: Indiana University Press

ISBN: 9781860205972

Category: Law

Page: 102

View: 5539

Massive changes are taking place all over the world in redefining the relationship between government, public, and private institutions. Nowhere is this redefinition more urgent than in communications, where widespread privatization and deregulation of telecommunication companies and broadcasters has created a need for new modes of corporate governance in the new global marketplace. In this study, Wolfgang Schulz and Thorsten Held set out to find answers to key questions relating to the changing role of government--especially in regulating the transnational communications industry--and to provide a tool kit for what they call regulated self-regulation applicable across the world.

Corporate governance

the Hong Kong debate

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Author: S. H. Goo,Anne Carver,John Whitman

Publisher: N.A

ISBN: 9789626611937

Category: Business & Economics

Page: 593

View: 6063

Corporate governance

practices, procedures, and powers in British companies and their boards of directors

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Author: Robert Ian Tricker

Publisher: Gower Pub Co

ISBN: N.A

Category: Business & Economics

Page: 319

View: 629

Corporate Governance and Capital Flows in a Global Economy

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Author: Peter K. Cornelius

Publisher: Oxford University Press

ISBN: 9780195347586

Category: Business & Economics

Page: 527

View: 2938

This volume is a timely and insightful exploration into the issues of corporate governance and the impact of corporate governance practices on investments in developing countries. Sponsored by the World Economic Forum, INSEAD, and Wharton, this book collects original essays from senior researchers at the worlds top academic institutions as well as from key policymakers and business leaders, It analyzes global aspects of governance in relation to such issues as corporate performance, privatization, venture capitalism, and workers. With global financial markets having become more integrated, the book pays particular attention to the role of corporate governance in emerging-market economies and international capital flows. Rich in facts and ideas, Corporate Governance and Capital Flows in a Global Economy is a must read for anyone interested in financial crises international risk management, and global competitiveness.

The Structure of Financial Regulation

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Author: David Mayes,Geoffrey E. Wood

Publisher: Routledge

ISBN: 1134123809

Category: Business & Economics

Page: 464

View: 2806

This book examines the area of financial regulation in the banking sector. Editors Mayes and Wood bring together such acadmics as Charles Goodhart, Charles Calomiris and Kern Alexander whose expertise shines through this volume to provide a reference tool for researchers, students and bankers themselves which will prove invaluable.

Corporate Governance in Context

Corporations, States, and Markets in Europe, Japan, and the US

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Author: Klaus J. Hopt,Eddy Wymeersch,Harald Baum,Hideki Kanda

Publisher: Oxford University Press on Demand

ISBN: N.A

Category: Law

Page: 927

View: 761

Increased regulatory competition has sharpened the comparative awareness of advantages or disadvantages of different national models of political economy, economic organization, governance and regulation. Although institutional change is slow and subject to functional complementarities as wellas social and cultural entrenchment, at least some features of successful modern market economies have been in the process of converging over the last decades. The most important change is a shift in governance from state to the market. As bureaucratic ex-ante control is replaced by judicial ex-postcontrol, administrative discretion is replaced by the rule of law as guidelines for the economy. Furthermore, at least to some extent, public enforcement is being reduced in favor of private enforcement by way of disclosure, enhanced liability, and correspondent litigation for damages. Corporatistapproaches to governance are giving way to market approaches, and outsider and market-oriented corporate governance models seem to be replacing insider-based regimes.This transition is far from smooth and poses a daunting challenge to regulators and academics trying to redefine the fundamental governance and regulatory setting. They are confronted with the task of making or keeping the national regulatory structure attractive to investors in the face ofcompetitive pressures from other jurisdictions to adopt state-of-the-art solutions. At the same time, however, they must establish a coherent institutional framework that accommodates the efficient, modern rules with the existing and hard-to-change institutional setting. These challenges - put in acomparative and interdisciplinary perspective - are the subject of the book. As a reflection of the transnationality of the issues addressed, the world's three leading economies and their legal systems are included on an equal basis: the EU, the U.S., and Japan across each of the subtopics ofcorporations, bureaucracy and regulation, markets, and intermediaries.

Public Law and Private Power

Corporate Governance Reform in the in the Age of Finance Capitalism

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Author: John W. Cioffi

Publisher: Cornell University Press

ISBN: 9780801449048

Category: Business & Economics

Page: 287

View: 5225

Cioffi argues that highly politicized reform of corporate governance law has reshaped power relations within the public corporation in favor of financial interests, contributed to the profound crises of capitalism, and eroded its political foundations.