Not as Easy as It Looks: Regulating Effective Corporate Governance
Accounting scandals, executive misconduct, and poor management at once-prosperous corporations have shaken investor confidence in corporate integrity, and worse, in the mechanisms that are supposed to ensure good corporate management. What will it take to restore confidence? This Commentary suggests that the markets will respond with innovations and adjustments that lead to better management, accounting, and disclosure. Greater government policing has an important, but limited, role to play. This Commentary was adapted from talking points and notes prepared for various seminars and workshops related to financial system reforms.
The views authors express in Economic Commentary are theirs and not necessarily those of the Federal Reserve Bank of Cleveland or the Board of Governors of the Federal Reserve System. The series editor is Tasia Hane. This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. This paper and its data are subject to revision; please visit clevelandfed.org for updates.