SEC’s White Wants Companies’ Directors to be Gatekeepers
Speaking at the 20th Annual Stanford Directors’ College earlier this week, U.S. Securities and Commission (“SEC”) Chair Mary Jo White emphasized the significance of board of directors as the gatekeepers for shareholders of public companies. Relied upon by the SEC, White remarked that the role as gatekeepers allow directors to identify and prevent companies from violating federal securities laws, as well as respond to issues the moment they arise.
In regard to directors as gatekeepers, White’s speech also noted:
– The board of directors are a company’s most important gatekeepers, and it is by law their responsibility to watch over the business and any related matters.
– Directors must communicate expectations of senior management and the company, and make sure they are met.
– If witnessing suspicious activity or need clarification on something, directors should ask the tough questions.
– If a serious offense has been discovered, directors should decide whether, how and when to notify the SEC, and if the wrongdoing will require public disclosure.
For a full transcript of White’s speech, visit the Accounting Research Manager site.