Wednesday, June 08, 2005
Post-Enron Regulatory Changes Have Their Good and Bad Sides
Don't buy recent headlines declaring the post-Enron era of corporate regulation to be over. For better and worse, it isn't.
The proof can be found in Washington, where business lobbyists have decided not to push for even modest revisions in the Sarbanes-Oxley law. Why? Because they know public opinion is still against them. If new legislation is unleashed, there is no telling where politicians, with their fingers to the wind, might let it go. (Limits on executive compensation, anyone?)
Even at the Securities and Exchange Commission, the appointment of a staunchly free-market chairman will change less than business groups would like. President Bush's nominee, Rep. Chris Cox (R., Calif.), is a smart man who will be eager to avoid not only the mistakes of his predecessor, William Donaldson, but also those of Mr. Donaldson's predecessor, Harvey Pitt. It was Mr. Pitt's call for a "kinder, gentler" SEC that helped spark the criticisms that eventually led to his resignation.
Mr. Cox "has been through the political wars," says Mr. Pitt, who has lost 95 pounds on the South Beach Diet since leaving the SEC more than two years ago. "He brings that additional skill to the process." Mr. Cox's political instincts will argue against a wholesale rollback of post-Enron initiatives.
Mr. Bush's nomination of Mr. Cox and the Supreme Court's overturning of the Arthur Andersen verdict do provide an opportunity to pause and take stock of the changes that have occurred since the Enron scandal broke. Some clearly have been good for the economy and business; others clearly haven't.
posted by Brian Moran @ 10:19 AM