Congratulations, Mr. Donaldson, on your appointment this week as the new Securities and Exchange Commission Chairman.
As your predecessor Harvey Pitt’s brief, yet headline-grabbing tenure showed, the task you have before you is fraught with peril – and cannot be accomplished by someone who has neither the stomach, nor the will to stand up for investors above all else, but who also understands and can navigate the political Beltway tides.
You must tread wisely down a new path if you want to restore the nation’s faith in our capital markets, and in the corporate directors, bankers, and accountants whose job it is to make sure companies report their financial condition clearly and accurately.
Here are some unsolicited tips that might help you keep your job, and may even get your name written in the history books:
- Make sure Sarbanes-Oxley is implemented, but not with a heavy hand. Take into account the ancillary effects on accounting firms and the businesses they serve before sending in a wrecking ball. Find those in the profession who understand how it works – and who you trust – and let them help guide you.
- Demand truthfulness from everyone in a corporation or accounting firm who touches a financial statement or audit opinion. Punish every transgressor with jail time and force them to make financial remunerations to investors. Would-be white collar criminals need a strong deterrent or they will run roughshod once again.
- Fear no one, and don’t let any interest group or politician dictate your agenda. Washington is a town filled with power-hungry, self-interested climbers who will stop at no one and nothing to get what they want. It’s your job to make them want what you feel is best for investors and for the nation – and to firmly rebuff anyone who tries to steer you in another direction.
- Be honest,. open, and accessible to the press – and keep your distance from anyone under investigation. The media is especially suspicious of government appointees from industry who are now supposed to crack down on their former golfing buddies. Don’t hold closed door meetings if you don’t have to, and use the press as your ally to regain investor confidence.
- Get an agenda, get great people on board to carry it out, put the pedal to the metal, and get the job done. The world wants the corporate scandals and accounting messes to go away. You have the power to make this a reality. It may involve a few more scandals, but if the public is convinced you’ve got right on your side, they’ll come along for the bumpy ride – knowing that eventually it will have a happy, and smooth ending..
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