Corporate Governance Regulation: How Poor Management Is Destroying the Global Economy

Preface

The global economy is swaying to and fro, reeling under the excessive pressures caused by market turmoil, unruly debt burdens, and poor and ineffective regulations that have exacerbated rather than calmed the crisis.¹ The leading international regulatory agencies appear to be paralyzed by the crisis, while seeming to have little insight into its root causes. In the United States, policymakers have, out of an apparent sense of futility, sought to emulate King Canute the Great, by blithely commanding the unruly financial markets to follow a propitious trend.²

Unfortunately, the most recent event in a two-act play—referred to simply as “Dodd-Frank”—is likely to prove no more effective than its regulatory antecedent, the Sarbanes-Oxley Act of 2002, which failed miserably,³ while costing U.S. taxpayers more than $1 trillion.⁴ The result is the development of a U.S. corporate governance policy that notably lacks a rational basis,⁵ a precise outcome that has contributed significantly to the global crisis.

A major purpose of this book is to reignite a stalled policy debate—one that has witnessed more rhetoric than rational argument—so as to facilitate the development of efficacious policy, firmly moored in a secure, rational foundation. Thus, it is intended for legislators, policy makers, and analysts, corporate executives, scholars, and students of various disciplines. It employs an eclectic approach to policy analysis—one that includes a wide variety of models and analytic techniques—and ...