In the context of corporate governance, compliance means obeying the law (Deloitte & Touche, 2003). Because of the most recent corporate scandals such as Enron and WORLDCOM legislation has cracked down on corporate accountability for compliance. Some of the most recent major changes to corporate compliance include the Sarbanes-Oxley Act of 2002, along with related mandates by the Securities and Exchange Commission and new listing rules created by the major stock exchanges raising the bar for ethical and effective corporate compliance (Deloitte & Touche, 2003). This paper discusses some of the most important key concepts to corporate compliance including compliance related issues, responses, and the outcomes of several benchmarked companies. A comparison of the issues identified in each benchmarked company is also presented.
Compliance Concepts Corporate Governance: Corporate governance is referred to as a set of processes, policies, laws and institutions affecting the way a corporation is directed or controlled.
The relationships among the stakeholders and the goals for which the corporation are involved are also included in corporate governance. Ensuring the accountability of certain individuals in an organization is the goal of corporate governance. The U.S. federal government passed the Sarbanes-Oxley Act intending to restore public confidence in corporate governance (http://searchfinancialsecurity.com). Some of the corporations researched made the proper changes and adjustments needed to respond to corporate governance, whereas the others folded under the pressure and were penalized severely for their actions.
The Role of Stakeholders: Often overlooked, or undefined, the role of stakeholders can get lost in the quest to maximize shareholder value and stock price. Stakeholders include the employees of the firm, customers, and members of the community. Stakeholders are hard to put an accounting price on, but they can contribute or decrease shareholder value. Successful companies find a balance in decision making and time spent...