7 June 2002
The Enron/Andersen debacles/excesses are already having numerous major impacts on business accountability in the US, and many of the changes will flow through to New Zealand in the form of accounting practice standards or stock exchange requirements. A notable one from Nasdaq is a proposal to have a majority of independent directors on corporate boards. Same call was made here 15 years ago, maybe this time it’ll happen. The proposed Nasdaq rule changes are generally designed for bigger outfits than the standard NZ company, but include recommendations that compensation committees be composed entirely of independent directors, that there be a cooling-off period before former auditors of the company can serve on corporate audit committees, the scope of audit committee authority be expanded, continuing education for directors be strengthened, compliance methods be introduced to support corporate codes of conduct, and a requirement that non-US companies disclose if they’ve received waivers of corporate governance standards.