1. SOX has introduced sweeping changes in the name of enforcing corporate ethnics. Is it really a “fair” piece of legislation? Explain your answer.
In my opinion, it is not a really a “fair” piece of legislation.
In 2002, the passage of Sarbanes-Oxley heralded sweeping reforms affecting the content and preparation of disclosure documents by public companies. As part of the reforms, the legislation requires companies to disclose the fundamental business values by which the senior management of companies operates.
SOX is widely credited for strengthening at least two major areas of investor protection:
(1) CEO and CFO responsibility and accountability for all financial ...view middle of the document...
2. Do US ethical problems give us the right to demand ethical controls from international companies based outside the United State?
No, because every act has their own limitation. The act who enforce is US can’t enforce in others area. Therefore, although ethical controls is enforcing in US now but it is only limited in US, we have no rights to enforce it outside US. However, for US companies who based overseas, the US government has the right to enforce the ethical act to them. Besides that, ethical issues happen in US do not means that it happens outside US as well. It is not fair to apply the same perception to country or companies that perform ethically. The same issue who happens between different countries may consider ethical in certain country due to its culture. For example, giving presents to higher official in US is a kind of bribery but in North America country, it a normal culture.
3. Is there any evidence of good corporate governance in this case?
Yes, the hero welcome received by John Thain as the CEO of Merrill Lynch is one of the evidence of good governance in this case at the very first place. John Thain had earned the title of “Mr. Fix it” as he had lead the company to a successful public offering in 2006 after the successful stints at both Goldman Sachs and the New York Stock Exchange.
Apart from that, the evidence of good corporate governance in this case shows in John Thain as he successfully made Merrill back on track. The tough...