UK corporate governance has influenced corporate governance regulation in the European Union and United States.
A detailed analysis of several UK corporate governance reports, in particular
revealed that the UK has been able to influence US corporate governance regulation (Sarbanes-Oxley Act 2002 [SOA] on “Corporate Responsibility”, enacted by the Senate and House of Representatives of the United States of America).
In return, through SOA the US is influencing and accelerating the development of an EU wide governance regulation. “The Commission has expressed serious concerns over the [US] measures put forward, in particular the unnecessary outreach effects of the SOA for EU companies and EU auditors.” (Com 2003/C236/02, page 9). EU based corporations, which have US parent companies or subsidiaries that are listed at the US stock exchange (regulated by the Securities Exchange Commission) need to comply with the Sarbanes-Oxley Act 2002. Therefore, the Commission has reconsidered EU priorities on initiatives on the enhancement of corporate governance, which was initiated by the Commission’s 1996 Green Paper (COM 1996/321) on “The Role, Position and Liability of Statutory Auditor in the EU” and laid down in Council Directive 84/253/EC ‘the 8th Directive’.
Following recent financial reporting scandals, the requirement to implement standards for the EU capital market to enhance public trust in the audit function in the EU and the need to respond to SOA, the Commission prepared with the Winter report. In September 2003 the Commission published the Communication (2003/236/02) on “Reinforcing the statutory audit in the EU” and in parallel an Action Plan on “Modernising Company Law and Enhancing Corporate Governance in the European Union”. The Directive (2006/43/EC) on “statutory audit of annual accounts and consolidated accounts, amending Council Directive 78/660/EEC and 83/349/EEC and repealing Council Directive 84/253/EEC” was adopted by the European Parliament on the 28.9.2005.
The new modern regulatory audit framework will be applicable to non-EU audit firms performing audit work in relation to companies listed on the EU capital markets. To achieve recognition of the EU regulatory approaches to the protection of investors and other stakeholders, the Commission has had regulatory discussions in particular with the SEC but also with decision makers in US Congress and EU Finance Ministers.
Text published by Guido Reinke (2009) "The European Information Society: Governance and the Decision-Making Process for ICT Policy and Standards", Royal Holloway College, University of London (London: PhD Thesis).