The previous chapter examined how the US reacted to a series of prominent and highly
publicised company failures such as Enron, WorldCom and Tyco by reforming the regulatory
framework and introducing both the Sarbanes-Oxley Act of 2002 and reforms to the listing
rules of the New York Stock Exchange and NASDAQ. This chapter examines the global
financial crisis triggered by the subprime mortgage collapse and the federal reforms that
followed. In addition, it examines the criticism that the discipline of risk management received
in the aftermath of the crisis and new approaches to systemic risk. As will be seen, the financial
crisis is important from an enterprise risk management perspective as it has catapulted risk
management into the spotlight for all the wrong reasons. Subsequent chapters examine the
approach to corporate governance adopted in Australia and Canada, economies that enjoy
higher governance standards and which have not suffered destructive scandals to the same
degree.