The highly visible accounting scandals that surrounded the collapse of Enron, WorldCom and several other major companies — together with the revelation of fraud and other acts of malfeasance by corporate executive — have aroused public outrage, called into question the values and ethics of business leaders, and undermined the public’s confidence in public companies. CED is concerned about the reality, as well as the appearance, of corporate impropriety.
March 21, 2006, CED released Private Enterprise, Public Trust: The State of Corporate America After Sarbanes-Oxley, a policy statement that examines the state of corporate governance in the United States and offers practical recommendations for restoring public trust in business. The report was released at Washington, D.C. forum that featured remarks by the Honorable Christopher Cox, Chairman of the U.S. Securities and Exchange Commission (SEC).
Additional remarks were heard from CED Co-Chair Roderick M. Hills, Partner, Hills Stern & Morely LLP; Joseph Minarik, Sr. Vice President & Director of Research, CED; Cono R. Fusco, Managing Partner – Strategic Relationships, Grant Thornton and Patrick McGurn, Executive Vice President, Institutional Shareholder Services.
Sarbanes-Oxley regulations and other new government-imposed rules, though beneficial on balance and deserving of time to become fully effective, are not sufficient to restore trust in business, notes the CED statement. CED recommends additional practical and effective changes — in financial statements, executive compensation, selection of corporate boards, and other matters — that do not require new government mandates.
CED’s recommendations include:
