ABSTRACT
This chapter presents ways of responding to the resulting loss of confidence in American business. Restoring public confidence in the conduct of American business is most fundamentally a challenge for business leadership itself. A number of voluntary, private-sector actions in the area of corporate governance could also help restore public confidence in capitalism in the United States. Scandalous decisions in giant corporations operating beyond the effective control of their boards of directors have drained public confidence. The New York Stock Exchange (NYSE) has rules requiring each listed company to establish an audit committee consisting entirely of outside directors. A well-functioning audit committee is truly the conscience of the corporation. Its members review the work of the organization's own internal auditors as well as the activities of the outside accounting firm. An effective and timely response, more than any government action, will help to maintain investor and public confidence in the private enterprise system.
