Corporate Governance: What It Means for the Average Exec
FountainBlue's November 17 Connections Event was on the Topic of Corporate Governance: What It Means for the Average Exec Corporate Governance is at the center of all investors' minds as decision-makers for companies of all sizes are charged with mitigating the risk of high-profile business failures, such as Enron and WorldCom. In order to reinforce investment confidence and protect investors by improving the accuracy and reliability of corporate disclosure, executives today are adopting Sarbanes-Oxley compliance standards, proactively managing board communications, and, in general, building corporate infrastructure and processes to automate reporting and accounting practices.
This Month's Facilitator was Richard Brenner, CEO of The Brenner Group, http://www.thebrennergroup.com/services/corpgov.html, and chairman of the audit committee for the fastest growing bank in the United States. Rich helps small and mid-market public and emerging private companies proactively plan for corporate governance practices, but also assists in harnessing the positive impact of financial reporting and disclosure activities throughout the organization. Rich facilitated a prestigious panel who will share their knowledge and insights on proactively developing and managing corporate governance plans. Mark Leahy, Partner, Fenwick & West Leinani Nakamura, Partner, Mohler Nixon Tom Sa, Executive Vice President and Chief Administrative Officer, Bridge Bank
Below is a Summary of Notes and Advice for your reference, drawn on the wisdom of our facilitators and each of you as participants. With the recent corporate scandals, there is a public outcry against the behavior of coporate executives There was a similar outcry against the behavior of the banking industry in the 80s, and federal mandates helped to reform that industry. The Sarbanes-Oxley corporate governance requirements might do the same for corporate America, and may be worth the administrative and financial burden for complying with these requirements.
Boards are more involved as the duty of loyalty and the duty of care (to meet frequently, to understand the issues) is enforced through SOX.
With more involvement and participation and ownership from leadership, the 'tone at the top' may be better, with higher integrity, better accountability, better communications, better transparency, etc.,
The requirement for independent auditors and an audit committee helped ensure better run companies with better internal controls, cleaner partnerships with independent auditors, more proactive ownership of issues, earlier notifications of problems, earlier preparation
The code of conduct for CEOs, CFOs, Directors and Staff has helped ensure clear guidelines for behavior and encouraged consequences for breaches in conduct
The disclosure requirements encourage transparency of communication, proactive management, etc.,
The certification requirements encourages planning, process, validation, etc.,
Companies are encouraged to take some early steps to prepare for 404 Compliance, prior to the start of the documentation and testing process, even before they become public.
However, there are tremendous time, money and loss-of-opportunity costs for complying to these standards above
As a result there are fewer finance professionals, particulary at the senior level, just at a time when we need them more
As a result, fewer companies are deciding to go public, and more are going through M&A exits
As a result, CEOs in smaller public companies are opting to merge with another company rather than accepting the legal, fudiciary and other requirements demanded for senior executives.
As a result, companies may choose _not_ to go public due to the additional SOX requirements.For more information, visit http://www.FountainBlue.biz.
This Month's Facilitator was Richard Brenner, CEO of The Brenner Group, http://www.thebrennergroup.com/services/corpgov.html, and chairman of the audit committee for the fastest growing bank in the United States. Rich helps small and mid-market public and emerging private companies proactively plan for corporate governance practices, but also assists in harnessing the positive impact of financial reporting and disclosure activities throughout the organization. Rich facilitated a prestigious panel who will share their knowledge and insights on proactively developing and managing corporate governance plans. Mark Leahy, Partner, Fenwick & West Leinani Nakamura, Partner, Mohler Nixon Tom Sa, Executive Vice President and Chief Administrative Officer, Bridge Bank
Below is a Summary of Notes and Advice for your reference, drawn on the wisdom of our facilitators and each of you as participants. With the recent corporate scandals, there is a public outcry against the behavior of coporate executives There was a similar outcry against the behavior of the banking industry in the 80s, and federal mandates helped to reform that industry. The Sarbanes-Oxley corporate governance requirements might do the same for corporate America, and may be worth the administrative and financial burden for complying with these requirements.
Boards are more involved as the duty of loyalty and the duty of care (to meet frequently, to understand the issues) is enforced through SOX.
With more involvement and participation and ownership from leadership, the 'tone at the top' may be better, with higher integrity, better accountability, better communications, better transparency, etc.,
The requirement for independent auditors and an audit committee helped ensure better run companies with better internal controls, cleaner partnerships with independent auditors, more proactive ownership of issues, earlier notifications of problems, earlier preparation
The code of conduct for CEOs, CFOs, Directors and Staff has helped ensure clear guidelines for behavior and encouraged consequences for breaches in conduct
The disclosure requirements encourage transparency of communication, proactive management, etc.,
The certification requirements encourages planning, process, validation, etc.,
Companies are encouraged to take some early steps to prepare for 404 Compliance, prior to the start of the documentation and testing process, even before they become public.
However, there are tremendous time, money and loss-of-opportunity costs for complying to these standards above
As a result there are fewer finance professionals, particulary at the senior level, just at a time when we need them more
As a result, fewer companies are deciding to go public, and more are going through M&A exits
As a result, CEOs in smaller public companies are opting to merge with another company rather than accepting the legal, fudiciary and other requirements demanded for senior executives.
As a result, companies may choose _not_ to go public due to the additional SOX requirements.For more information, visit http://www.FountainBlue.biz.
posted by Linda Holroyd at 8:26 AM
