Business Ethics and Corporate Governance, Second Edition

THE GROWTH OF MODERN IDEAS OF CORPORATE GOVERNANCE FROM THE USA

The seeds of modern ideas of corporate governance were probably sown by the Watergate scandal during the Nixon presidency in the US. Subsequent investigations on the scandal revealed that the regulators and legislative bodies failed to control and stop several major corporations from making illegal political contributions and bribing government officials. The need to arrest such unhealthy trend was translated into the legislation of the Foreign and Corrupt Practices Act of 1977 in America that provides for the maintenance and review of systems of internal control in an establishment. In the same year, the Securities and Exchange Commission (SEC) proposed mandatory reporting on internal ...