Final Essay

3035 Words Apr 26th, 2015 13 Pages
3/2/15 Final Paper
Evaluate the challenges that for-profit public companies face from recurrent scandals, political attacks and alternative corporate structures such as the B-corp.
“Public companies have been the locomotives of capitalism since they were invented in the mid-19th century. They have installed themselves at the heart of the world’s largest economy, the United States.”[Economist, p.1] “Public companies have shown an extraordinary resilience. They have survived the Depression, the fashion for nationalization, and the buy-out revolution of the 1980’s.”[Economist, p.8] Even though they do face some mighty large challenges ahead, they will hold strong in the near future but may eventually continue a downward trend as other
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The Economists states “Public companies have always had to put up with more regulation than private ones because they encourage ordinary people to risk their capital. But the regulatory burden has become heavier, especially after the 2007-08 financial crisis.” [p. 6] Just as corporations can have the positive influence of the laws and regulations for their core business areas they also inadvertently in a way have a negative influence as well. The things you do, good or bad, are both going to gain attention and be heavily regulated; so you’re influencing both. But only so much regulation can help stem scandals, more attention is needed inside corporations to create the kind of environment where trust and integrity is more pervasive. In an April 14, 2005 speech before the U.S. House of Representatives, Paul stated, "These regulations are damaging American capital markets by providing an incentive for small US firms and foreign firms to deregister from US stock exchanges.” [www.wikipedia.com] We are continuing to see the number of American companies deregistering from public stock exchanges increasing along with the continued decrease of new initial public (IPO’s). “The reluctance of small businesses and foreign firms to register on American stock exchanges is easily understood when one considers the costs Sarbanes–Oxley imposes on businesses. According to a survey by Korn/Ferry International, Sarbanes–Oxley cost Fortune

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