Abstract
The front-page corporate scandals that erupted in the U.S. economy beginning in 2001—Enron, WorldCom, Tyco, Adelphia, HealthSouth, and others—have undermined confidence in the U.S. business system and raised questions about the effectiveness of corporate governance in the United States. While some may see these scandals, and the related financial irregularities, as simply the products of a few dishonest or unethical corporate mangers cuaght up in the collapse of the stock market bubble that began in 2000, the pervasiveness of the corporate misconduct suggest otherwise—that there was a massive failure of U.S. corporate governance to prevent this corporate misconduct. This paper, therefore, seeks to determine why this failure occurred and what can be done to improve our governance system.