'And They All Lived Happily Ever After?' – Improving Corporate Law after Enron: A Review Essay

Abstract:     
Corporate law has long engaged in something of a fairy tale world imagining after each era of great corporate scandals that the world has been set right again and that we can all rest assured that the root causes of these scandals have been adequately addressed by law makers or regulators. Unfortunately, this is all far from the truth. Corporate law and corporate law reform often provide a vital legitimation function and serve to give integrity to, and to instil public confidence in, corporations and their management practices. After a short public bloodletting or castigation of miscreants, we are generally all too eager to move on and return to normalcy without necessarily addressing the root cause of the problems that created the latest corporate scandal. The growth of the new economy of the 1990s came to a watershed with the collapse of many of the darlings of this era; companies like Enron, WorldCom, Tyco and Global Crossing in the United States, Marconi in the UK and OneTel in Australia come to mind. We are still dealing with the implications of these corporate failures and this is reflected in an important new book, ("After Enron: Improving Corporate Law and Modernising Securities Regulation in Europe and the US", edited by John Armour and Joseph McCahery) that is reviewed in this paper.

Number of Pages in PDF File: 10

Keywords: Corporate Collapse, Enron, Scandals, Law Reform, Corporate Governance

JEL Classification: K22, G35

Accepted Paper Series