Dell, the world's second largest PC maker has agreed strengthen its accounting and corporate governance rules as part of a settlement tied to an investigation into its past accounting procedures. At the same time it will will also pay $1.75 million in legal fees according to a settlement filed with the Securities and Exchange Commission. Dell has not admitted any wrongdoing as part of the settlement.

After an SEC investigation into Dell's accounting was made public in 2006, several shareholders, including the UK's GBP7bn West Midlands pension scheme, filed lawsuits saying Dell misrepresented its financial health while officers and board members sold stock at inflated prices. Dell restated results for the period 2003-2007 after an internal audit found it overstated sales by $359 million and profit by $92 million during those years.

Under the settlement filed with the SEC, Dell has agreed to ensure that at least 60 percent of its board members outsiders; pay for additional training for board members and give directors open access to Dell's employees. Dell had already implemented some changes as the lawsuit progressed but the settlement requires the changes t be extended and enforced for four years. Among the requirements are: an accounting code of conduct; enhanced ethics, compliance and insider-trading training; the creation of a global team of accountants to focus on revenue recognition issues; and a whistle-blowing procedure to allow employees make anonymous complaints about auditing or internal controls.

The question that will arise in many shareholders' minds is why this issue ever had to go through the courts in the first place?

Yes, wrong-doing must be corrected and the remedies that shareholders have achieved are clearly essential. But it's worrying to think that what they have been required to do is not just global best practice, but a basic minimum requirement in other jurisdictions. Unfortunately, until shareholders can remove US directors on a legally binding vote, the courts would appear to be the only route to reform in the US.

G20 may have achieved much press coverage for its attempts to curb bank pay, but until global shareholders have global rights to enforce basic protections, their pronouncements about protecting shareholders and investors have a hollow ring.

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