New York - With crackdowns on accounting and investment banking already well underway, the Securities and Exchange Commission is turning its attention to public companies’ boards of directors, SEC Chairman William Donaldson told a group of leading business and finance executives.
“It’s time to move the discussion to a fundamental review of corporate governance,” Donaldson said at a meeting of the Economic Club of New York.
The new SEC chairman’s comments came a week after the SEC laid out plans for a $1.4 billion settlement with 10 Wall Street firms accused of issuing tainted stock research to investors, and almost a year after the enactment of the federal Sarbanes-Oxley law that regulates the auditing of public companies.
Donaldson said that corporate America should be reminded that “the job of boards is to provide strategic direction and oversight.” That, he said, includes scrutinizing public companies’ growth plans to avoid cycles of big expansion followed by severe retraction, and greater oversight of executives’ salaries.
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