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CORPORATE GOVERNANCE AND RISK MANAGEMENT

The first decade of the millennium saw two major waves of corporate failures, first in the nonfinancial sector (2001–2003) and then in the financial sector (2007–2009), both of which were attributed in part to failures of corporate governance. As a result, corporate governance1 and its relationship to risk oversight is a continuing concern around the world, and especially in the United States and Europe.

The first wave of failures included, most notoriously, the bankruptcy of energy giant Enron in 2001, a wave of “new technology” and telecom industry accounting scandals at companies such as WorldCom and Global Crossing, and, to prove that the problem wasn’t confined to the United States, the collapse ...

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