Corporate governance in the aftermath of the scandals: the EU response and the role of ethics

The purpose of this Thesis is to study corporate governance and its regulation in the aftermath of the scandals that have taken place in the United States and in Europe during the last few years. Corporate governance is a vibrant and constantly changing area of law and the adoption of a regulatory framework must be carried out with both an institutional and dynamic approach. Following the wave of scandals and collapses, corporate governance has topped every agenda and has become one of the most discussed topics worldwide. The focus so far has been placed just on the rules, while the role of ethics has been significantly undermined. The Sarbanes-Oxley Act was the American response to the voices asking for strict rules and severe penalties. The European Union has adopted a more cautious and liberal approach, choosing the path of harmonisation and convergence. The Action Plan represents the roadmap for the future, but it is still not clear what exactly the form of corporate regulation in the European Union will be in the following years. This Thesis explores the recent reforms and provides some thoughts on the nature of the regulatory response that the EU needs to adopt, in order to provide a protective shield against fraud and mismanagement. Self-regulation proved to be insufficient, while regulatory competition and reflexive harmonization are examined as alternative choices. Rules and regulations are important, but do not suffice to solve all corporate governance problems and prevent corporate scandals. No corporate governance reform will be successful unless ethics do become an integral part of modern business strategy, creating a ethical corporate culture, and if all the actors involved do not change their philosophy regarding how they make business.