2002 was a turbulent year for economies across the globe. All of the major international stock exchange indices recorded double-figure fall-offs in value – the DAX fell by as much as 45 percent. This sharp decline reflects a widespread collapse in confidence in the financial markets, and in the companies whose shares are traded on them, on both sides of the Atlantic. The causes of this loss of faith are many and varied: ‘self-serving’ analysts, auditors and investment bankers; ‘misleading or falsified’ financial statements, ‘greedy’ managers, the proliferation of share options, repeated failures to meet targets… the list is endless.
In the past, the US corporate governance system was held up as the model for everyone to follow. However, its unimpeachable reputation has been dealt a severe blow by recent major scandals – and this has brought a new level of objectivity to the corporate governance debate. The crisis showed that not everything that comes from the USA is inherently good, just as not everything that comes from Europe – particularly continental Europe – is inherently bad.
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