On one side of the argument was a gentleman from the US Securities and Exchange Commission, who was expounding on the success of Sarbanes-Oxley (SOX). On the other side was a range of European leading lights who had concluded that SOX was just what the EU didn’t need.
Wow, did the fur fly. But the discussion also underlined some fundamental differences between the European and the US approach. Europeans complain that Americans rush into change, without proper circumspection. In the case of SOX, they may well have a point – even its advocates will admit it has weak points.
On the other hand, Americans charge the Europeans with sticking their heads in the sand on corporate governance. And they say the unwillingness to roll out SOX within the EU will prove to be a mistake, in time.
I think that what the two sides of the Atlantic are suffering from is ‘not invented here’ syndrome. What is needed is a blank sheet of paper for the development of a global corporate governance standard. A set of ‘best practices’ that draws on the experience and the expertise of the US and the EU would boost the development of global capital markets – as well as the moral cause of corporate governance – substantially.