International Trade and Commercial Law - Research Paper Example

Download file to see previous pages The underpinning factor about the effectiveness of the SOX Act is that the law does not have adverse consequences on any given company’s succession plans. The law has curtailed practices that were previously considered to be retention strategies applied by principal executives, for instance allowing personal loans to the company executives or allowing chief executive officers to be members of corporate boards as they discuss financial packages. Such malpractices were undoubtedly partly to be blamed for the rampant unaccountability and lack of transparency in giant corporations such as Enron, hence the massive corporate collapses in the United States. The SOX Act was enacted as a result of the need to prevent further corporate governance failure. There was also a need to obtain more control over company executives who are in charge of monitoring management practices within their organizations.

Australia also experienced its share of the consequences of ineffective corporate governance. The collapse of HIH Insurance is a good example of this. Of particular interest also are the allegations of governance irregularities in companies such as OneTel, as well as the roles played by company boards in firms such as Harris Scarfe and AMP. Other major collapses include two mining companies namely Cebatur and Pasminco. Corporate governance is therefore a matter that requires a set of robust regulations to ensure effectiveness, and along the same line, Stapleton notes that corporate governance has remained a front-page issue in Australia.

This research aims to determine the state of corporate governance in Australia. Given this, it will be important to look into the roles played by the Corporate Law Economic Reform Programme (CLERP) of 1998 and the Australian Securities Exchange (ASX) Corporate Governance Council Principles of Good Corporate Governance and Best Practice Recommendations that were released in March 2003 and revised in 2010. This will be coupled with a critical analysis of the impact of the implementation of the SOX Act and how the law has transformed corporate governance in the United States. ...Download file to see next pages Read More