Influence of Corporate Governance on Investors Protection

By

TABLE OF CONTENTS

CHAPTER 1: INTRODUCTION3

Background of the Study3

Importance of the study4

Rationale of the Study4

Aims and Objectives5

Ethical Concerns5

Structure of the Dissertation6

CHAPTER 2: LITERATURE REVIEW8

CHAPTER 3: METHODOLOGY9

Research Strategy9

Practical Implementation9

Search Strategy9

Research Evidence Inclusion Criteria10

Study Selection Criteria11

Quality Criteria12

Data Extraction strategy12

Consideration of Rigour12

Gantt Chart13

REFERENCES14

INTRODUCTION

Background of the Study

Following a number of scandals involving corporate governance issues that ultimate lead to bankruptcies, the most famous being Enron Corp. and WorldCom Inc. in the United States, many shareholders have not only lost their fortune, but on the other side, general investors also lost their confidence in the financial markets. In some cases, one can also observe that the top leadership of these companies were also the one who has a major shareholding in the company. In the wake of sequence of tragic incidents, the Government of the United States responded quickly after the events, including implementing new laws with the main aim of protecting the interest of general investors and shareholders. It was decided that confidence and the operation of capital markets should be restored at all costs. The most famous of the new U.S. law is the "Public Company Accounting Reform and Investor Protection Act.". This law is better known under the name "Sarbanes-Oxley Act" (SOA); "Paul Sarbanes 'and' Michael Oxley" being two members of Congress who have contributed much to the development of this legislation and about which U.S. President George W. Bush declared upon signature 30 July 2002, that it would be "the most far reaching reform of American business practices since the time of Franklin Delano Roosevelt. At first glance, it seems that new U.S regulations have only strengthened the sanctions already in placed. If we review the cases and scandals that has been come to the surface in last two decades, we will discover that the top management mainly the CEO has been heavily penalized in many cases. While, in other cases, companies have been succeed in presenting someone else as scapegoat and levied all the charges on single individual. In today's world which is growing in complexity, one wonders how can a single person can do all the wrong in the corporate setting where activities are so intermingle that one can hardly carry out any task in isolation. While in US, Sarbon Oxley Act 2002 was brought to front, in Europe, similar reforms can also be observed. The European Commission has carried out an analysis of the effects of the collapse of Enron on European Union (EU). This report drove policymakers to act to make sure that appropriate arrangements are within the European commercial law to prevent among other "Creative" accounting practices. Nevertheless, we can say that the legal systems of both sides of Atlantic differ only in their nature but at the hub of the issue, both are protecting the interests of general investors. 

Importance of the study

Investors invest their money to earn profits. They let go of funds from their hands in the hope that they will be getting higher amount for this action. However, there is a risk involve. It might be the case that they would not get ...