gued that though the models are different, they are increasingly oriented toward greater accountability and transparency.
In the United States, a corporation typically is governed by a board of directors, with each member occupying a position of responsibility unlike that of other corporate personnel (Miller & Jentz, 2000). The role of the director in a typical American corporation focuses on declaring and paying corporate dividends to shareholders, authorizing major corporate policy decisions, appointing, supervising, and removing corporate officers and other managerial employees, and the determination of their compensation, and overseeing financial decisions such as the decision to issue authorized shares and bonds. While Miller and Jentz (2000) do note that the board of directors in an American corporation can delegate some of its functions to an executive committee of corporate officers, in doing so, directors do not lose their fiduciary obligations to the company.
The fiduciary obligations of American corporate directors include the duty of care and the duty of loyalty. In the case of the duty of care, directors and corporate officers alike are required to be informed on corporate matters and to make reasonable decisions and to exercise reasonable supervision of corporate activities. Under the rubric of the duty of loyalty, directors are prohibited from taking advantage of a corporate opportunity, competing with the corporation, engaging in insider trading, authorizing a corporate transaction that is detrimental to minority shareholders, and from using corporate facilities for personal business (Anderson, et al, 1998; Miller & Jentz, 2000).
With revelations regarding directorial and executive irresponsibility and illegality shaking the foundations of the American business sector, the Congress acted to strengthen corporate governance procedures. Julien and Rieger (2003) described the Sarbanes-Oxley Act and re...