Mechanisms of corporate governance are significant , given that corporate governance is about how corporations use their resources among their many stakeholders to settle disputes. A distinction between systems of governance must, however, be made. On the one hand, there are internal governance structures which are under the direct control of the company's owners; on the other, there are external governance mechanisms which are not under the control of the company's owners, but which represent the characteristics of governance which are specific to the countries in which they work. Such country features have a great effect on the corporate governance structures in which companies operate Corporate governance has become an essential indicator of the performance of a government. It has been described as the primary mechanism for enhancing investor trust, increasing productivity and fostering economic growth. With the downfall of Maxwell Publishing Company, Britain was the first country to be devastated by scandal. To deal with this, Britain took the initiative to create a regime of governance. The United Kingdom replied with the Cadbury Report (1992), which aimed to set strict guidelines defining what was supposed to mean good governance. In the meantime, several other circumstances have arisen, such as the cases of Poly Beck, BCCI in the 1990s and, more recently, Marconi in Britain, demonstrating dishonest conduct or bad governance. After the failures of Holzman, Berliner Bank and Babcok, Germany had its share of misery. Australia, with Ansett Airlines and One Tel failing, and Switzerland, with Swiss Air failing, joined the party. In the global financial climate, many situations have arisen that have created significant concern among nations. In the United States, the failures of Enron , Worldcom and Tyco made headlines and, as with some past failures, caused some concern (AlHares, 2020). The outcome was the passage of the Sarbanes-Oxley Act (2002), which since the Great Depression has been considered to be some of the most far-reaching legislation of its kind. The Cadbury Report (1992) and the Sarbanes-Oxley Act (2002), these two governance findings, show Their influence on the principles of the OECD, a fact recognised by the OECD in its publication (AlHares, 2017). Because of a number of scandals in OECD countries, the development of corporate governance has come about. The United Kingdom 's response to scandals in that country was the Cadbury Report (1992). In 1999, the OECD Corporate Governance Principles were the initial response to a lack of good governance that led to scandals. In 2002, the U.S. experience with scandals led to the creation of a governance structure, the SarbanesOxley Act, and a few years later, with the 2004 Principles of Corporate Governance, the OECD followed this by strengthening its governance principles. The application of this definition has also led to other OECD countries and international organisations. The OECD has considered changes that have been made to corporate governance in its member countries since its 1999 Guidelines, integrating several of these changes into its own 2004 Corporate Governance Principles, while adopting a forward-looking strategy. The OECD recognised that, in order to keep pace with evolving global situations, changes and inventions were needed. The changes in financial markets have been characterised by greater interest among OECD members in new types of institutional investors, a relative decline in banking and increased pension savings (OECD Survey, 2004). These constituted a new state of affairs that had to be discussed in the sense of OECD 's 2004 Principles. It was also understood that new approaches to sustain high quality governance would be needed as new implementation problems arose. The principles were revised in 2002 by the OECD Corporate Governance Steering Committee, which ultimately culminated in the new 2004 Corporate Governance Principles.
Author (s) Details
Aws AlHares
Department of Accountancy and Finance, Business School, University of Huddersfield, UK and School of Business Management & Information Technology, College of the North Atlantic in Qatar, Doha, Qatar.
Tarek Abu-Asi
School of Business Management & Information Technology, College of the North Atlantic in Qatar, Doha, Qatar.
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