Sarbanes-Oxley and the Board of Directors: Techniques and Best Practices for Corporate Governance / Edition 1

Sarbanes-Oxley and the Board of Directors: Techniques and Best Practices for Corporate Governance / Edition 1

by Scott Green
     
 

If you're a sitting or prospective board member of a corporation, how can you ensure that you and other directors are in compliance with Sarbanes-Oxley and other regulatory requirements? How can you maximize your contribution to the board and the company, and minimize your risk as a board member?

Serving on the board of directors of a company is a tremendous

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Overview

If you're a sitting or prospective board member of a corporation, how can you ensure that you and other directors are in compliance with Sarbanes-Oxley and other regulatory requirements? How can you maximize your contribution to the board and the company, and minimize your risk as a board member?

Serving on the board of directors of a company is a tremendous honor, but now it's also a tremendous responsibility. Due to legislation and regulations stemming from corporate fraud at Enron, WorldCom, and other companies, board members are now under scrutiny—particularly their role in the oversight of financial reporting and corporate governance practices. Board members must be informed and engaged. Directors are charged to represent the interest of the company's shareholders. Failure can result in damage to a person's reputation and personal liability. The risks are not limited to directors of large public companies. Recent legislation applies to publicly held companies, but not-for-profit entities and other companies are increasingly held to similar standards.

Sarbanes-Oxley and the Board of Directors is a practical, down-to-earth guide for board members. It covers everything from board basics to compliance with regulations . . . from corporate culture and values to assessing and reacting to hostile shareholder activities.

Complete with real-world examples, vignettes, case studies, and other information, this guide helps board members, CEOs, CFOs, and others understand their responsibilities and potential liabilities and implement effective corporate governance. It covers:

  • Building a strong framework for effective governance
  • Ways to protect board members (including an analysis of the strengths and weaknesses of indemnity and insurance protections)
  • Board committees—ones to have and ones to avoid
  • Establishing high standards and healthy board dynamics
  • Specific guidance for effective corporate oversight and communications
  • Red flags that signal the need for prompt investigation and action
  • Specific issues faced by not-for-profit boards, advisory boards, and boards of small public companies

Sarbanes-Oxley and the Board of Directors also includes proven best practices from preeminent companies that can serve as benchmarks and models for evaluating and strengthening corporate governance. It gives directors the knowledge, techniques, and tools to serve the company and its stockholders well.

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Product Details

ISBN-13:
9780471736080
Publisher:
Wiley
Publication date:
07/29/2005
Series:
Wiley CIA Exam Review Ser.
Pages:
313
Product dimensions:
0.75(w) x 9.21(h) x 6.14(d)

Table of Contents

Preface.

Acknowledgments.

Chapter 1: A Sturdy Framework.

PART I: GOVERNANCE FACTOR I.

Building a Strong Foundation.

Chapter 2: Making of a Governance Revolution.

Regulatory Development in the United States.

Relative Maturity of Worldwide Governance.

Chapter 3: Board Basics.

Independence Is the Key.

Board Size Matters.

Committees: Source of Functional Support.

The Imperial CEO.

Director Development.

Chapter 4: Dealing with Your Liability Up Front.

Business Judgment “Bunker”.

Next Line of Defense: Indemnity and Insurance.

Reputation: A Priceless Asset.

PART II: GOVERNANCE FACTOR II.

Organize to Lead.

Chapter 5: Minding the Numbers: The Audit Committee.

A Strong Constitution: The Audit Committee Charter.

Your Financial Experts.

Listen to the Whiners.

Managing the Auditors.

Red Flags of Financial Reporting.

Internal Control: Six Smart Precertification Steps.

Chapter 6: How Much Is Fair?: The CompensationCommittee.

Designing the Plan.

Unspoken Cost: Stock Options.

Piecework: Transaction Compensation.

Danger of Oversized Parachutes.

Measuring Performance.

Unwanted Incentives.

Tell Us about Your Shareholder Equity Plan.

The Fight Is On!

Chapter 7: Keeping It Clean: The CorporateGovernance/Nominating Committee.

Governing the Board.

Setting the Rules.

Evaluating the Board.

And the Directors.

And the CEO.

Next! Succession Planning.

Finding That Perfect Director.

Is the Strategy Still Valid?

Chapter 8: Other Committees to Have and to Avoid.

Where Have All of the Executive Committees Gone?

Reemergence of Finance Committees.

When Public Policy, Safety, and Research Are Drivers.

Addressing Special Occasions.

PART III: GOVERNANCE FACTOR III.

Insist on High Standards.

Chapter 9: Hard Work of Building Corporate Values.

What We Stand For: Statement of Corporate Values.

Establishing Behavioral Boundaries.

Reporting Bad Behaviors.

Rewarding the Good.

Learning to Communicate Openly.

Chapter 10: Healthy Board Dynamics.

Deciding Who We Are and How We Will Operate.

Coveted Culture.

Wanting to Be Engaged.

Informed and Prouvéd of It.

In the Spirit of Independence.

Talking Frankly: Executive Sessions.

Balance the Board.

Insist on the Best and the Brightest.

Final Decision.

PART IV: GOVERNANCE FACTOR IV.

Let Them Know You Are Watching.

Chapter 11: Art of Oversight.

Business Perspective: Monitoring Operations.

Risk Perspective: Monitoring Threats and Dangers.

Compliance Perspective: Monitoring Management.

Chapter 12: Hostile Activities.

Repelling Sharks.

Staggering Boards.

Ingesting Poison Pills.

Voting Confidentially.

Antishareholder Provisions.

PART V: GOVERNANCE FACTOR V.

Communicating Clearly.

Chapter 13: Speaking to the Crowd.

Importance of Managing Integrity.

Disclosing Operating Weakness.

Responding to Regulatory Scrutiny.

Shareholder Activists: The Emerging Marker.

What Not to Do.

Damage Control.

Chapter 14: Required Communications.

Perfecting Event Reporting.

Other New Reporting Requirements.

OTHER USEFUL ADVICE AND CONCLUSIONS.

Chapter 15: Big Money, Little Money, No Money.

The Moneymakers.

Not-for-Profit Boards.

Serving on Advisory Boards.

A Word about Small Public Companies.

Chapter 16: A Call to Service.

Appendix  A: GMI Corporate Governance Ratings.

Appendix B: General Motors Corporation: Audit Committee ofthe Board of Directors Charter.

Appendix  C: Board Evaluation Tool: NACD Sample BoardSelf-Assessment Questionnaire.

Appendix  D: Champion Enterprises, Inc. CEOEvaluation.

Appendix  E: Statement of Values: Johnson &Johnson Credo.

Appendix F: TIAA-CREF Principles for Fund Governance andPractices.

Index.

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