The Securities and Exchange Commission made it clear this week that the clubby era of corporate boardrooms is ending. Its first major directive in this arena, post-Sarbanes-Oxley, was to mandate this week that audit committees control the hiring, firing and oversight of a public company’s outside auditors.
The goal is to improve corporate governance by giving more power, and liability, to board directors.
The SEC also voted this week to bar companies from being listed on stock exchanges if they don’t meet independence standards for audit committees.
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