Worme, K (2023) Corporate Governance – A comparative analysis of the approach to corporate governance regulation and enforcement in the UK and the US. Doctoral thesis, Liverpool John Moores University.

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Abstract

Corporations play a crucial role in the functioning of global economies. As a result, the importance of regulating corporate behaviour continues to be a topic of great debate. Despite the introduction of corporate governance regulations over two decades ago, instances of corporate misconduct continue to emerge, which calls into question the effectiveness of corporate governance regulations to prevent and detect corporate misconduct. It is well accepted that regulations alone cannot prevent misconduct. To be effective, regulations must be adequately enforced. The UK and U.S. have adopted two different approaches to regulating corporate behaviour. While the UK has adopted a voluntary comply-or-explain approach, the U.S. has adopted a rules-based approach with mandatory compliance and sanctions for non-compliance.

The main aim of this study is to investigate the differences in the approach to corporate governance regulation and enforcement in the UK and the United States. In so doing, the research ventures beyond the law in the books and considers how the law operates and how it is enforced. The study combines doctrinal, socio-legal and comparative law methodologies to achieve the research objectives and uses Becker’s theory on measuring enforcement to analyse the effectiveness of enforcement in the UK and the United States.

The study concludes that the approach to corporate governance (the rules-based or principles-based) does not materially impact corporate misconduct. Instead, the study contends that the effectiveness of the UK’s approach to corporate governance enforcement is hindered by a cluttered enforcement framework with multiple civil and criminal regulators. As a result of the centralised approach adopted in the U.S., this study finds that there is a higher likelihood that U.S. directors will face sanctions for corporate misconduct, when compared to their UK counterparts. Given that the effectiveness of regulations is measured in relation to its enforcement, the effectiveness of the UK system of corporate governance enforcement to deter corporate misconduct is questionable. Ultimately, there is little incentive for directors to engage effectively in preventing and detecting corporate misconduct.

Item Type:	Thesis (Doctoral)
Uncontrolled Keywords:	corporate governance; corporate governance enforcement
Subjects:	H Social Sciences > HF Commerce > HF5001 Business H Social Sciences > HB Economic Theory H Social Sciences > HF Commerce
Divisions:	Business & Management (from Sep 19)
SWORD Depositor:	A Symplectic
Date Deposited:	05 Jun 2023 09:47
Last Modified:	05 Jun 2023 09:47
DOI or ID number:	10.24377/LJMU.t.00019580
Supervisors:	Lui, A and Panara, C
URI:	https://researchonline.ljmu.ac.uk/id/eprint/19580

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