Inside-out Corporate Governance‪.‬

I. INTRODUCTION In the past decade, two major corporate and financial crises have shaken the foundations of corporate governance in rapid succession. In 2001 and 2002, Enron, WorldCom, and several other major U.S. corporations collapsed after evidence of accounting fraud emerged at each company. (1) By the time lawmakers and regulators had finished dealing with the fallout from these scandals and with the Sarbanes-Oxley Act of 2002 (2) and other reforms, a new crisis emerged with the distressed sale of the largest subprime lender, Countrywide Financial, and the subsequent collapses of Bear Stearns, Fannie Mae, Freddie Mac, Lehman Brothers, Merrill Lynch, and AIG. (3)