Edited by Benton E. Gup
Corporate governance became a major concern to the US government, businesses, investors and academics after Enron ﬁled for bankruptcy in December 2001. The Enron scandal was followed by scandals at Tyco, Global Crossing, ImClone Systems, WorldCom and others. Congress reacted to the scandals by enacting the Sarbanes-Oxley Act (SOX) that was signed into law in 2002. Some say that SOX was an overreaction to the scandals; and while it has some good points, the costs of implementation are excessive. Corporate governance also gained in importance because of globalization. For example, there is a move towards international accounting standards, and the International Accounting Standards Board (IASB), based in London, is committed to developing a single set of high quality, understandable and enforceable global accounting standards.1 Similarly, the Basel Committee on Banking Supervision, that is part of the Bank of International Settlements (BIS), issued a guidance entitled ‘Enhancing corporate governance for banking organizations’. It is based on papers published by the Committee in 1999, and the principles for corporate governance issued by the Organization for Economic Co-operation and Development (OECD) in 2004. ‘This guidance is intended to help ensure the adoption and implementation of sound corporate governance practices by banking organizations worldwide, but is not intended to establish a new regulatory framework layered atop existing national legislation, regulations or codes.’2 Against this background, this book examines various aspects of corporate governance in banking from a global perspective. Because banking is regulated, the scandals and governance problems are less spectacular than Enron. Nevertheless,...