Abstract

The demands for corporate sanity and probity have increased tremendously in recent years, especially in the aftermath of the Enron Scandal, whose impacts were so profound that it ushered in a wave of corporate and securities law reforms both in the US and globally. International organizations, civil society, financial institutions, multinational corporations, business men and scholars have joined the bandwagon by being unanimous in their clarion call for more accountability and transparency in the ways companies are managed. Aside the Enron Scandal which exposed managerial frailties, such clarion call might have also been largely influenced by the view that the way a company is managed might reflect to a certain extent the way it does business. Hence an assumption that bad management would not only be detrimental to the shareholders who have invested their fortunes in the company, but might have long-term ramifications on local communities in particular and to the host country in general. For instance, the company might go bankrupt and current investors might pull out, thereby creating unemployment and sending a very bad impression to prospective investors contemplating business ventures in such a host country. The answer to these uncertainties has been the emergence of corporate governance codes and/or pieces of legislation with Sarbanes Oxley Act of the US, being one of the oft-cited examples.