Impact of Sarbanes Oxley Act, 2002 on GlaxoSmithKline UK Essay

Impact of Sarbanes Oxley Act, 2002 on GlaxoSmithKline UK - Essay ExampleGlobally, several legislative and administrative requirements in the form of new accounting standards, requirements as to detailed disclosures in financial statements and stricter enforcement of regulations on securities exchanges have been prescribed to ensure that brass section of corporate entities is maintained at levels that be beneficial to themselves as puff up as to the people dealing with such bodies corporate. In the past, corporate brass instrument had been used to protect the interests of company stockholders. However Corporate Governance has assumed a new proportion in the post Enron and Post Globalisation scenario as almost every major developed and developing nation ensures some sort of promotion and protection of corporate governance principles.However there are certain basic views or models that describe the corporate governance practices universally. According to Tricker (1996) Stewardship theory, stakeholder theory and agency theory are all essentially ethnocentric Tricker (1996) observes although there is no change in the underlying ideologies there are conflicting theories of corporate governance realized on the basis of the perceptions and expectations of the respective roles of individual, enterprise and the state. The basic principles of the different theories depend largely on the relationships that exist between these agencies.The conflicting views on the corporate governance are presented belowThe Agency ModelHawley & William (1996) state the emphasis of corporate governance lies in constructing rules and incentives in the form of implicit or explicit contracts for the endeavor of aligning the behaviour of managers being the agents with the expectations of the owners being the principals. Under the agency theory of corporate governance it is assumed that the will power of the firms is dispersed as the American modern corporation. The main consequence of su ch a form of dispersed ownership is that there exists a gap between the owners representing the principals of the firm and those who are responsible for the running the day to day operations of the firm who are known as agents. Thus as Shelifer and Vishny (1997) state, agency theorists aim to understand how investors get the mangers to give them back their money and hence minimize agency costs. According to Jensen & Meckling (1976) since the relationship between the owners and managers of a corporation is that of a pure agency relationship, the issues associated with the separation of ownership and control in the modern ownership corporation are also mostly agency based.The Stewardship ModelIn the stewardship model,