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Sarbanes-Oxley News & Developments
Sometimes More Seems Like LessMost reform measures dance around the main interest - conflict of interest.
> > Since the collapse of Enron, a host of companies have followed it into Chapter 11, or infamy, or both. Taking up the banner of corporate reform, new laws and regulations - to say nothing of commercially available solutions - were introduced faster than CFOs could empty their in boxes. Yet many of these efforts - especially those intended as preventive measures, not as fixes - often seemed to do little more than cloud the issues.
Some new rules, such as the Sarbanes-Oxley financial literacy requirements for audit committee members, Harvard Business School professor Quinn Mills, considers bureaucratic idiocy. Indeed, one finding of a recent CFO survey of senior financial executives - examined in CFO September cover story - Sticker Shock - is that only 30% of respondents said that the benefits of Sarbanes-Oxley compliance outweigh the costs.
A more direct approach to address conflicts of interest, says Mills, would be to split the roles of chairman and chief executive officer, so the same person would not serve two masters - management and shareholders. But at most companies, one sure way to get thrown off the board is to propose that the CEO not be a chairman. This measure, and many others that follow, apply just as well to businesses in good corporate health - but trying to be healthier - as they do to businesses on the mend.
Source: CFO
Published:2003-10-24
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