Having proper corporate governance in place promotes fairness, responsibility, accountability, transparency most importantly upholds moral integrity. I find transparency and responsibility to be the more meaningful of these key points. Transparency allows the shareholders to make informed decisions and the ability to observe the company's financial reports and decision-making abilities. Moreover, responsibly plays a major in holding those that commit fraudulent crimes accountable and to an extent is a preventative measure. Besides penalizing aspects of responsibility corporation must understand that it has a responsibility to protect the shareholders investment. On the other end the lack of corporate governance in place encourages corporate scandals such as Enron, WorldCom, Volkswagen, and predatory mortgage lending by big banks occurring. The banks aggressive mortgage tactics created an economic disaster which resulted in many individuals being foreclosed and losing their homes. In addition to many homes being worth less than the original purchase price. Furthermore, corruption, fraud, negligence, and the lack of accountability are results of the lack of corporate governance. Many of these events are result of the lack of ethics, policies, and human greed. Therefore regulations such as Sarbanes-Oxley(SOX) are essential moving forward in the corporate world.

Reference

Roche, Marianne. Community Banker. Dec2008, Vol. 18 Issue 12, p46-47. 2p., Database:Business Source Complete

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