Corporate Governance - External and Internal Pressures

Chapter Three talks about Corporate Governance which is shaped by external and internal mechanisms.
I would re-term it as pressures. 
The Board of Directions is usually aligned with management since, more than likely, there is a personal relationship between management and Board members.  This can lead to impairment of judgement by board members who may look the other way as long as the financials look good.  The audit committee should be accessible to the internal auditors so that any fraud concerns can be dealt with before they become a matte of public concern.
Problems come into play when management changes the tone from the top.  Once the CEO adopts a certain ethical stance, then it permeates or contaminates every aspect of the financial process.  So, it turns into a career limiting move to report anything but good financial news.
The best organization will have the internal auditors completely independent from management.  Don't know how you do that since the internal auditor is hired, usually by managment.  So is it realistic to expect total independence?  In the Enron case, Cooper did report to the audit committee, but it seemed that her reason was because she saw the storm coming and wanted to distance herself from the fallout.  I think she weighed the consequences of reporting versus her larger financial career.