Important read. Detailing the extensions proposed on corporate regulations, namely CFO role. Leadership, management and board of directors
Excerpt: Self-proclaimed shareholder advocates have extended Sarbanes-Oxley reforms deeper and deeper into the business. Now some are going too far, pushing those regulations into areas that intrude on effective corporate administration. The latest and most misguided attempt to “improve” corporate governance in this way comes from Nell Minow, founder of the corporate-risk rating firm, GMI Ratings, who was recently quoted in The Wall St. Journal arguing that CFOs should report directly to the audit committee of the board.
Not “report regularly.” Not “report in executive session, without the presence of the CEO.” Both of these are common enough practices today. No, Minow is suggesting that CFO essentially work for the audit committee. As she puts it, when she’s evaluating a company, “the most important thing I look for in a CFO is someone who reports directly to the audit committee, because what I want is a CFO who is absolutely clear that his or her job depends on telling the truth to the board.”
There are four main problems with her proposal.
Read full article via Keep Your Sarbanes-Oxley Off My CFO – Bob Frisch – Harvard Business Review.