Crashes, Bailouts, Regulations
With the recent stock market frauds in markets around the world such as the Madoff case in the U.S. and the recent Satyam fraud in India, no nation can hold its head high and claim to have good corporate governance. The reality is that the problems...
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| Language: | English |
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Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2009/03/10333897/crashes-bailouts-regulations http://hdl.handle.net/10986/11124 |
| Summary: | With the recent stock market frauds in
markets around the world such as the Madoff case in the U.S.
and the recent Satyam fraud in India, no nation can hold its
head high and claim to have good corporate governance. The
reality is that the problems of fraud, faulty audits,
misleading accounts, lack of transparency, conflicts of
interest, criminal destruction of records and a long list of
other corporate governance violations, are not limited to
emerging markets but are very much in evidence in developed
markets as well. Given recent events then, the importance of
sound corporate governance is becoming increasingly
apparent. International organizations like the Organization
for Economic Co-operation and Development (OECD), the World
Bank and the International Corporate Governance Network
(ICGN), along with major fund managers, are formulating sets
of codes and principles that can be applied globally. It is
also clear, however, that governments have generally done a
poor job of policing the complex world of finance and that
the greater part of the task will be left to self policing
on the part of the participants. There is no doubt about it:
sound corporate governance pays. Several studies undertaken
by various organizations have shown that: there is a direct
relationship between good corporate governance and
investment returns. The oversight that comes from
transparency and accountability creates a structure where
the managers are discouraged from mismanaging the company,
be it though a lack of diligence or care, improper
decision-making, or even intentioned unconscionable behavior. |
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