Corporate Governance: the United States of America vs. the European Union

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Introduction
The following paper will compare and contrast corporate governance in the U.S. and European Union. Because corporate governance regulations are not yet uniform across all EU countries, we have chosen to examine Poland in particular. We will first present U.S. corporate governance and the Sarbanes-Oxley Act of 2002, and then examine how Poland's corporate governance regulations compare. Finally, since we have already learned about Corporate Social Responsibility for U.S. companies, we have examined Corporate Social Responsibility in Poland, looking specifically at the largest airline in Poland, LOT. U.S. Corporate Governance
Due to several U.S. corporations violating the public trust and federal laws, the Securities and Exchange Commission established laws that all public corporations must follow in order to restore investor and public confidence as well as create uniform corporate guidelines, called the Sarbanes-Oxley Act of 2002. The New York Stock Exchange also adopted these rules, which are required of any company that wishes to be listed in their index. The NYSE rules parallel Sarbanes-Oxley and we will examine these thirteen rules in order to see how the U.S. compares to Poland.
The first rule is listed companies must have a majority of independent directors (NYSE, 4). This is to insure that the board of directors in not completely comprised of people who work for or previously worked for the company, which could create an abuse of power. The requirement of independent directors gives the board an outside perspective, "increases the quality of board oversight, and the possibility of damaging conflicts of interest" (NYSE, 4).
Rule number two refers to the independent directors and qualification of being independent. It requires that in order to be independent, the director must have no material relationship with the listed company, which includes stipulations such as working for the company in the last three years, an immediate



Cited: New York Stock Exchange. (2004, November 3). Corporate Governance Listing Standards. Retrieved February 8, 2006 from http://www.nyse.com/pdfs/section303A_final_rules.pdf *New York Stock Exchange. (2002, August 1). Approved Corporate Governance Rule Proposals. Retrieved February 12, 2006 from http://www.nyse.com/pdfs/corp_gov_pro_b.pdf (Rule 8 has not been changed from the original enactment)

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