Corporate Governance and Regulation: Can There Be Too Much of a Good Thing?

After every crisis, academics, policymakers and other observers reflect on what went wrong and what could have been done differently. This in turn leads to some reforms to laws and regulations. In the wake of widespread, multi-country corporate governance failures in the 1990s and 2000s (Enron, Tyco and Xerox in the U.S., for example, Maxwell, BCCI and Polly Peck in the UK, Parmalat in Italy and Ahold in the Netherlands), the call was for company law reforms and better corporate governance practices. The recent global financial crisis has led to many new regulations, and the revamping of existing ones, covering … Read more