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Regulatory Responses to Global Corporate Scandals

49 Pages Posted: 2 Mar 2006  

Jennifer G. Hill

The University of Sydney Law School ; European Corporate Governance Institute (ECGI)

Abstract

The Enron and WorldCom collapses mirrored a global phenomenon, which included scandals in the UK, Europe and Australia, where the collapse of the HIH Insurance group constituted the largest corporate failure in Australian history. These scandals, and the international regulatory responses to them, have important implications for comparative corporate governance debate. At the beginning of this decade, many commentators assumed that international corporate governance practices and regulation were inexorably directed towards convergence in the form of a standardized shareholder-centered Anglo-American model of corporate governance. This assumption needs to be reassessed in light of the global corporate scandals and evolving regulatory responses to them in jurisdictions, such as the US, UK and Australia. The paper discusses a range of post-Enron corporate governance and regulatory developments in these jurisdictions, in relation to: the balance between regulation by norms and laws; the role of the independent director; the role of the board; director and officer liability; and executive remuneration. While the regulatory responses have common themes, they also reflect significant differences in focus and nuance, and their contours are often closely tied to domestic corporate scandals.

Keywords: comparative corporate governance, corporate scandals, Enron, HIH, One.Tel, regulation, international reforms, norms, independent directors, director and officer liability, executive compensation

JEL Classification: G34, G38, J33, K22, K33, K40, M14

Suggested Citation

Hill, Jennifer G., Regulatory Responses to Global Corporate Scandals. Wisconsin International Law Journal, Vol. 23, p. 367, 2005; Sydney Law School Research Paper No. 06/35; Vanderbilt Law and Economics Research Paper No. 06-04. Available at SSRN: https://ssrn.com/abstract=886104

Jennifer G. Hill (Contact Author)

The University of Sydney Law School ( email )

New Law Building, F10
The University of Sydney
Sydney, NSW 2006
Australia
+61 2 9351 0280 (Phone)
+61 2 9351 0200 (Fax)

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

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