‘Just another book about Enron?’, one may ask. Hundreds of pages have already been written after the collapse of Enron. Just the mention of the word ‘Enron’ was enough to catch the attention of the public like a powerful magnet. Pressing questions include, what went wrong, what was the response and what sort of reforms are necessary in order to avoid similar scandals in the future. No matter how huge the existing literature is, John Armour and Joseph McCahery have identified a gap and edited a book, dealing with corporate governance in the aftermath of the series of scandals that shook the ground underneath the feet of the United States primarily and subsequently the European Union.
The main objective of the editors, as highlighted in the title of the book, is to detect and suggest the best ways to improve corporate law and to modernize securities regulation in both the sides of the Atlantic Ocean. The book consists of a collection of essays written by leading corporate law specialists, who have worked in the past on the issues related to Enron and its wider implications. Their contribution covers a wide range of issues and succeeds in touching upon the critical areas, which need further analysis. The names of the scholars do not establish the authority of the book. This is established by the comprehensive analysis and critique of the subject matter of the book. The ideas shared by the very distinguished scholars are presented in a way that the reader obtains a good overview of the debate on these topics.
The book is divided into four parts. The first part is devoted to the examination of market efficiency and, more concretely, the relation and interaction between stock markets and information. The second part looks at the corporate scandals in a historical and comparative context, considering their causes, their consequences and the lessons to be learned, as well as the similarities and differences of corporate governance systems worldwide. The evaluation of the regulatory responses in the US and UK is the subject discussed in Part III. Finally, the last part of the book tackles reform of EU Company Law and Securities Regulation. It mainly focuses on the quest for the ideal regulation and tries to find a balance in the dilemma: regulatory competition or harmonization.
It is noteworthy that the book does not focus on the facts and the details of the collapse of Enron, WorldCom or Parmalat. These have become common knowledge and their significance is self-evident. What the book brings under the spotlight are the responses to the scandals and the proposals for further reforms. Scandals have tended to repeat themselves in history, while the vast majority of regulatory changes and reforms have come as a response to such scandals. In this respect, it is of paramount importance to review and evaluate them, in order to use the conclusions as guide or benchmark for the future.
Overall, Armour and McCahery's book makes an important contribution to the corporate law literature. It is not just another book about Enron. It will probably mostly be read by specialized researchers, but the nature of the subject matter and its treatment in this book could draw, and hold, the attention of anyone interested in the international developments beyond the specialized scholars in the field of corporate governance.
