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Sarbanes-Oxley News & Developments
Boardrooms Under Renovation - Coming CleanScandals Prompted Changes, but Critics Say More Are Needed to Prevent Another Enron
> > A year has passed since regulators told U.S. businesses the old style of corporate governance could not continue.
The Sarbanes-Oxley Act (SOX) have spawned dozens of overhauls for publicly traded companies. They include more separation of the jobs of chief executive and chairman, and the appointment of more independent directors who do not have business ties to the company. Board audit committees must now have at lease one financial expert - or explain why they do not. The full audit committee must review financial statements every quarter after the CEO and CFO of a company certify them.
The reforms have raised awareness of honest procedures and the criminal liabilities of not following them. The changes may put an end to the country-club atmosphere of boards, where members care more about their resumes and networking than about guarding against corruption. Power has shifted from CFOs to boards by requiring outside - or nonmanagement - directors to hold frank discussions privately.
Source: WSJ article
Published:2003-07-22
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