Tuesday 7 October 2008

USA: the Emergency Economic Stabilization Act (2008) and corporate governance

Those hoping that the successful passing of the Emergency Economic Stabilization Act (2008) would calm the world's stock markets will be disappointed. But what does the Act contain with regard to corporate governance? Section 111 of the Act is titled "Executive compensation and corporate governance" and provides that any financial institution that sells troubled assets to the Secretary of the Treasury under the Act is required to meet "appropriate standards for executive compensation and corporate governance". As noted in this commentary, the Act is, however, silent on what corporate governance standards the Treasury will apply.

No comments: