Chap004尤恩,国际财务管理,英文第五版.pptVIP

The Sarbanes-Oxley Act Major components of the Sarbanes-Oxley Act include: Accounting regulation. Audit committee. Internal control assessment. Executive responsibility. Many companies find compliance burdensome, costing millions of dollars. Some foreign firms have chosen to list their shares on the London Stock Exchange instead of U.S. exchanges to avoid costly compliance. CFA Institute Ethical and Professional Standards of Corporate Governance The Board: – Is it largely independent? – Are the directors qualified? – Do they have access to outside resources? – How are they elected? – Do any directors have cross-company relationships? Management: – Do they have a code of ethics? – Are there lots of perquisites? – How is their compensation structured? Are they “cozy” with Mgmt? Are they vendors or customers? The Cadbury Code of Best Practice The Cadbury Code of Best Practice is an ethical standard, without the force of law. However, the London Stock Exchange requires listed firms to either comply or explain why they cannot. About 90 percent of LSE-listed firms comply with the code. The Cadbury Code of Best Practice Requires the board of directors of firms to: Meet regularly. Retain full and effective control over the company. Monitor executive management. The code says that there should be a clearly accepted division of responsibilities at the head of a company, such that no one person has unfettered power. The board should include non-executive directors in sufficient number for their views to carry weight. The Dodd-Frank Act The Dodd-Frank Wall Street Reform and Consumer Protection Act passed in reaction to the financial crisis of 2007-2009. Volker Rule: Deposit-taking banks will be banned from proprietary trading and from owning more than a small fraction of hedge funds and private equity firms. Resolution Authority: The government can seize and dismantle a large bank if the bank faces impending failure. The Dodd-Frank Act Derivatives: OTC derivatives trading wi