A Study of Corporate Scandals and Investor Protection
Date Issued
2006
Date
2006
Author(s)
Chan, Tsai-hung
DOI
zh-TW
Abstract
The surge of corporate scandals in the U.S., such as Enron and WorldCom, and the subsequent passage of the Sarbanes-Oxley Act have led to a renewed interest in corporate governance internationally. Domestically, a series of corporate scandals involving the Chung Shing Commercial Bank, Taichung Commercial Bank, Procomp Informatics, and Pacific Electric Wire & Cable have sparked heightened reactions from the government, related agencies, scholars and professionals.
Whether the capital market mechanism will function smoothly will depend upon its participants, including the listed companies, underwriters, lawyers, accountants, investors, creditors, and regulatory agencies, to assume their own responsibilities and abide by rules of the game. However, the conflicts of interest and agreements of interest among all participants in corporate scandals have allowed for the exploitation of professionals, the expansion of power, and the misuse of resources.
Since the 20th century, the change in corporate structure and the separation of ownership and control have left owners with the responsibility for distribution of compensation and earnings, while managers as agents are in charge of the company and authorized to use its resources. Agency costs thus come from an effort to monitor managers and motivate them to not sacrifice corporate organizational interests for personal gain.
From case analyses conducted by investigating and comparing foreign and domestic corporate scandals, we discover that modern corporate scandals are intelligent white collar crimes which are professional, tailor-made, and international. Where is the protective shield for investors? This paper attempts to draw a conclusion and subsequently offer suggestions.
Subjects
公司治理
白領犯罪
投資人保護
代理成本
弊案
Enterprise Governance
White Collar Crime
Investor Protection
Agency Cost
Scandals
SDGs
Type
other
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