Gatekeepers: The Professions and Corporate Governance

In the wake of a series of corporate governance disasters in the US and Europe which have gained almost mythic status - Enron, WorldCom, Tyco, Adelphia, HealthSouth, Parmalat - one question has not yet been addressed. A number of 'gatekeeping' professions - auditors, attorneys, securities analysts, credit-rating agencies - exist to guard against these governance failures. Yet clearly these watchdogs did not bark while corporations were looted and destroyed. But why not? To answer these questions, a more detailed investigation is necessary that moves beyond journalism and easy scapegoating, and examines the evolution, responsibilities, and standards of these professions. John Coffee, world-renowned Professor of Corporate Law, examines how these gatekeeping professions developed, to what degree they failed, and what reforms are feasible. Above all, this book examines the institutional changes and pressures that caused gatekeepers to underperform or neglect their responsibilities, and focuses on those feasible changes that can restore gatekeepers as the loyal agents of investors. This informed and readable view of the players on the contemporary business stage will be essential reading for investors, professionals, executives and business academics concerned with issues of good governance.

1. Introduction ; PART I: WHAT HAPPENED? ; 2. The Failure of Gatekeepers ; 3. Explaining Gatekeeper Failure? ; 4. A Comparative Perspective ; PART II: THE DEVELOPMENT OF GATEKEEPERS ; 5. The Rise, Fall, and Redefinition of the Auditor: From Bookkeeper to Professional to Information Consultant ; 6. Corporate Attorneys as Gatekeepers: The Short History of a Developing Concept ; 7. Securities Analysts ; 8. The Ratings Agencies ; PART III: THE SEARCH FOR REFORM ; 9. What Went Wrong? ; 10. What Should Work? (And How to Get There) ; 11. Conclusion: The Future of Gatekeeping