The Role of Corporate Governance in Averting a Financial Crisis - Research Paper Example

Corporate governance is the remedy that alleviates the fears of fund providers, so that resources may freely flow and productive activity flourish.In this study, events leading to the financial crisis of 2008 shall be examined in the light of corporate governance issues, and the subsequent reforms taken to address governance shortcomings are identified and assessed. In the broad survey of reforms, the sweeping reforms and bold initiatives taken by the Frank-Dodd Act in the US are noted as promising, although requiring fleshing out in the form of operational guidelines and particulars.

In the UK the long-term directions by Sir Gieve and Deputy Governor Tucker provide sound long-term directions for institutional reform, although, in light of the dilemma of the Northern Rock shareholders, the government may require strengthening of its commitment to corporate governance. Finally, the OECD Principles of Corporate Governance are seen to provide sound guidelines for the prevention of future crises, although general precepts must be translated to concrete action in order that the principles may become effective.

The first chapter introduces the topic of the dissertation, its expression in the form of a research statement, and the context in which the research problem is envisioned. The background is provided, and a framework is presented according to which the investigation is to be conducted. The aim and objectives of the dissertation are articulated in order to provide a focus for the discussion, and the main problem broken down into sub-problems to structure the resolution of the objectives. Finally, the importance of the study is described in terms of what significance the findings may contribute in terms of policies and practices related to the topic.

There is an ongoing debate on the role of regulation in the financial crisis.