Especially in light of current economic challenges, the globalization of business is more crucial, and challenging, than ever.
Just as the U.S. and Europe have different accounting standards – GAAP and IFRS – their corporate governance standards differ widely as well. Corporate governance, at heart, is designed to help protect the interests of the shareholders. The U.S. Congress chose to do that by enacting Sarbanes-Oxley, designed to increase disclosure and fight potential corruption through rigid audit and reporting requirements. The European Union (EU) has also enacted a number of directives in recent years which, unlike “SOX”, are less punitive and center more on shareholder empowerment and the “comply or explain” principle deriving from largely voluntary governance standards.
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