Financial scandals of the early 2000s were not unique to the United States. The
revelation of global financial scandals (Parmalat, Royal Ahold, etc.) encouraged
regulators worldwide to recognize the need to address the global corporate governance
deficiencies and work together to improve the quality, reliability, and
transparency of global financial reports to enhance the integrity and efficiency of
the global markets. Several initiatives have been taken to improve corporate governance
worldwide, while many specifically address a country’s improvements in its
corporate governance. No globally accepted set of corporate governance principles
or global regulatory framework governs corporations, global financial institutions,
or capital markets worldwide. As of 2006, regulators in the United States, the SEC,
the International Organization of Securities Commission (IOSCO), and the World
Federation of Exchanges (WFE) have yet to agree on a global regulatory framework
or a global corporate governance structure. The OECD’s international standards of
corporate governance have not achieved enough global acceptance to be included in
the global regulatory framework even though the ICGN highly recommends them
as corporate governance best practices.
The Commission of European Communities suggests that the European Union
(EU) should actively coordinate the corporate governance efforts and reforms of its
member states, requiring each member state to take four steps:
1. Identify its corporate laws, securities laws, listing rules, codes of conduct, and
best practices.
2. Make progress toward designating a code of corporate governance, intended
for use at the national level, with which listed companies should either comply
or disclose noncompliance.
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