ABSTRACT
The United States Supreme Court confirmed the original legislators’ intention to follow the British model in its judgement in Gustafson v. Alloyd Co. Unlike the British model, much of what is considered to be regulation of the corporate governance of corporate entities in the United States is effected indirectly through the regulation of securities markets pursuant to federal securities law. The Sarbanes–Oxley Act’s approach is extensively prescriptive in the requirements imposed on corporate management and boards to demonstrate accountability and sound governance processes and with respect to the information companies must provide to regulators and the market. The United States government introduced the Sarbanes–Oxley Act with the explicit purpose of restoring public confidence and trust in corporate governance, in the integrity of the markets and of corporate America, generally. Enron’s appearance of legally acceptable accounting and compliance under the United States federal reporting requirements masked the reality of its toxic corporate culture, manipulative financing and broken business model.
