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Sarbanes-Oxley News & Developments
Two Masters? Company Audit-Committee Boards Get ToughIn the wake of Sarbanes-Oxley, CFOs must now contend with more inquisitive directors.
> > Welcome to life under the Sarbanes-Oxley Act, where many finance chiefs find new authority figures placed on boards that may have once been the personal control of the CEO. Sometimes, these figures make demands of their own, quite separate from the wishes of the CEO. Rather than calling for reforms or setting agendas these recently anointed audit-committee czars or nonexecutive chairmen are at first firing questions at finance and at the CEO - as they seek to learn the intricacies of the new companies.
Cheryl Francis, audit-committee chair for Hewitt Associates, HON Industries, and Morningstar, views herself as a mentor as well as a watchdog at the companies on whose audit commitees she serves.
A lead director or a nonexecutive chairman can present a different challenge than a strong audit-committee chair. That is because the chairman sets the board agenda, and if that chairman has views that are different from those of the CEO, the CFO can be faced with having to serve two masters.
The move to balance CEO power by naming a nonexecutive chair, or a lead director, has been slow. In the past, a split chairman-CEO structure often was designed to team a veteran chairman, with a young CEO.
Source: CFO.com artice
Published:2003-06-02
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