After Enron Improving Corporate Law and Modernising Securities Regulation in Europe and the US

Author: John Armour; Joseph A. McCahrey
Publisher: Hart Publishing
ISBN: 9781841135311
Published In: November 2006
Format: Hardback , 728 pages
Jurisdiction: U.K. ? Disclaimer:
Countri(es) stated herein are used as reference only

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At the end of the twentieth century, it was thought by many that the Anglo-American system of corporate governance was performing effectively. Some observers claimed to see an international trend towards convergence around this model, in which firms raise finance on capital markets from dispersed investors, and corporate governance seeks to keep managers accountable to shareholders.

There can be no denying that the recent corporate governance crisis in the US - Enron and related scandals - has caused many to question their faith in this view. This collection of essays provide a comprehensive attempt to answer the following questions: firstly, what went wrong - when and why do markets misprice the value of firms, and what was wrong with the incentives set by Enron? Secondly, what has been done in response, and how well will it work - including essays on the Sarbanes-Oxley Act in the US, UK company law reform and European company law and auditor liability reform, along with a consideration of corporate governance reforms in historical perspective. Three approaches emerge.

The first two share the premise that the system is fundamentally sound, but part ways over whether a regulatory response is required. The first view argues that the events of the 'fall' have indicated a need for greater regulation to curb the excesses of the market. The second view suggests that Enron was merely an aberration, which 'self-corrected' anyway, and consequently the regulatory response has been unnecessarily restrictive. The third view, in contrast, argues that the various scandals demonstrate fundamental weaknesses in the Anglo-American system itself, which cannot hope to be repaired by the sort of reforms that have taken place. It is for the reader, and ultimately history, to decide which view is correct.

John Armour is University Senior Lecturer in Law, Cambridge University and research associate at the Centre for Business Research, University of Cambridge.
Joseph A McCahery is Professor of Corporate Governance and Business Innovation at the University of Amsterdam Faculty of Economics and Econometrics and Professor of International Business Law at Tilburg University Faculty of Law.

…covers a wide range of issues and succeeds in touching upon the critical areas, which need further analysis…an important contribution to the corporate law literature.
Stelios Andreadakis
International and Comparative Law Quarterly
Vol 57, Jan 08

This is an important book…the standing of the contributors is such that the book provides an excellent overview of current thinking in this area of corporate law…Hart Publishing and the editors of this volume are to be congratulated for the important contribution that After Enron has made to contemporary corporate law reform debates.
Roman Tomasic
Australian Journal of Corporate Law
2007