Friday, June 10, 2005
Corporate attitude change on governance is hard part
The work isn't done. In fact, the hardest task may still lie ahead.
That's the prediction of Isaac Hunt, a former member of the Securities and Exchange Commission who was in town Thursday discussing the outlook for corporate governance.
In 2002, Congress changed the law. Now, Hunt says, we have to change attitudes. Corporate cultures can't be legislated. Reforming them requires sending a persistent message that businesses must be vigilant in monitoring their corporate conduct.
Directors and auditors, in particular, need to realize that their roles have changed, says Hunt, who serves on the audit committee of the Philadelphia Stock Exchange.
Too few directors, he says, understand that shareholder interests are paramount.
"They are there to run the company for the shareholder. They are not there because they're friends of the chief executive," Hunt says. " That has always been the theory, but not necessarily the practice."
posted by Brian Moran @ 8:53 AM