Corporate Structures and Governance Arrangements Vary Widely From Essay

Corporate Structures and Governance Arrangements Vary Widely From Country to Country - Essay Example In normal parlance, the corporate governance (CG) has given more emphasis on disclosure, internal mechanisms and transparency with much focus to the financiers of the business. As per OECD (2004), this does not connote that the significance of stakeholders in general is deprived off1. Initially, Jensen and Meckling (1976) advocated stakeholder theory and then followed by Freeman (1984) who advocated an agency concept of accountability. Enron scandal resulted in the introduction Sarbanes-Oxley Act of 2002 which is a chief chapter in the vibrant annals of Anglo-American corporate governance renaissance2. As per OECD, managerial accountability elucidates governance responsibilities and roles and to make sure that shareholder’s interest and managerial interest are lined up and supervised by the board of directors3. The term â€Å" managerial accountability â€Å" can be defined as an understanding of a cluster of desired and predetermined yardsticks by which employees and manage ment alike, which can be gauged to be held responsible for specific actions or decision vis-a-vis some clearly explained role or responsibilities in a company4. As per Fisher(2004), the managerial accountability is nothing but the delegation of power which means of integrating relationships between institutions , demarcating responsibilities , improving legitimacy , controlling authority , and finally promoting democracy within a company and thus , the main goal of developing accountability is establishing trust in governance institutions in companies. In UK, the Cadbury Committee was asked to review those features of corporate governance especially pertaining to financial reporting and accountability as early in May 1991. This research essay will analyse in detail how the managerial accountability remain the same under corporate governance across various jurisdictions with particular emphasis to the USA , UK and Germany. Analysis What is Managerial Accountability? Stanton (1997) re fers Rosenfield finding on accountability as â€Å"the reasonable holding of one to be liable for personal decisions or to make a rejoinder to a charge where justiability is being ushered by an authority affiliation between the individuals concerned. From two perspectives, the authority relations can be assessed by two angles namely the stakeholder’s theory and the shareholder-value maximisation theory. As per Spira (2001), business organisations and individuals are discharged of their responsible obligations by disseminating the required information on a periodical basis to interested parties5. Business accountability connotes making the management of a company accountable for its performance and it includes making of business decisions on the proper usage of executive authority. Such business judgment can be employed only when the specific information is available. Further, accountability makes certain that the demeanour is compatible with the objects of the business, that it is consistent with the conditions that steer the company’s policy. In a way balancing the impact of the open market, which sets out prices and evaluates the real margin, a system of accountability offers objective yardsticks for administers and consulting performance. To evaluate the managerial accountability, it is necessary to assess the individual performance periodically whether it is the individual director, CEO, the outside auditor, the entire board or its officers and