Responding to a series of public companies’ corporate and accounting scandals, the United States federal government has passed the Sarbanes-Oxley Act, a significant federal act in corporate governance. This paper com...Responding to a series of public companies’ corporate and accounting scandals, the United States federal government has passed the Sarbanes-Oxley Act, a significant federal act in corporate governance. This paper comments on the important provisions of the Act and analyzes the governance characteristics and failures of public companies that the Act seeks to address and redress for the betterment of corporate governance. Most notably, the Act can be seen as taking corrective disclosure measures to enhance the ability of the boards of public companies to adequately monitor complex corporate finance transactions with the off-balance transactions of the SPEs being the chief component; imposing a more stringent level of management duties on the board and management to improve governance effect and efficiency; adopting non-market forces to restrain and counter-balance the powers of the board and management; and further strengthening public governance oversight functions by the SEC. The Act marks a new round of federal legislative efforts in dealing with the challenges posed by the intricacies of handling the relationships between and among the board, management, and shareholders in modern, especially large modern public companies of our times.展开更多
文摘Responding to a series of public companies’ corporate and accounting scandals, the United States federal government has passed the Sarbanes-Oxley Act, a significant federal act in corporate governance. This paper comments on the important provisions of the Act and analyzes the governance characteristics and failures of public companies that the Act seeks to address and redress for the betterment of corporate governance. Most notably, the Act can be seen as taking corrective disclosure measures to enhance the ability of the boards of public companies to adequately monitor complex corporate finance transactions with the off-balance transactions of the SPEs being the chief component; imposing a more stringent level of management duties on the board and management to improve governance effect and efficiency; adopting non-market forces to restrain and counter-balance the powers of the board and management; and further strengthening public governance oversight functions by the SEC. The Act marks a new round of federal legislative efforts in dealing with the challenges posed by the intricacies of handling the relationships between and among the board, management, and shareholders in modern, especially large modern public companies of our times.
