FEI's Committee on Corporate Reporting, in a July 30 letter to the New York Stock Exchange, supported a new set of listing standards the exchange has proposed -- but with a number of caveats and qualifications. The NYSE's governors voted to approve the new standards on Aug. 1.
In the letter, signed by CCR Chairman Frank H. Brod, the committee applauds the NYSE's efforts "to enhance accountability, integrity and transparency in the financial statements and to restore investor trust and confidence in the market." CCR supports the NYSE recommendation that all equity-based plans should require shareholder approval, calling that "an important check and balance" that would help "restore confidence in company compensation plans."
However, the committee raised issues in several areas:
Expanded audit committee responsibilities: CCR argues that it is "imperative to strike the right balance" between the committee's role and management's. While the audit committee must be proactive, "it cannot serve as a replacement for management or guarantee management's integrity." CCR recommends that the audit committee purpose "should not be extended to include compliance with legal and regulatory requirements,"...