Panel sessions: in addition to Keynote speakers, the 2002 Directors' College offered distinguished panels that discussed a range of current issues in corporate governance. Much of the focus of the panels was on the new Sarbanes-Oxley Act and supporting rules.

• Position: Brief Article - Panel Discussion

Panel: Current Issues in Governance

Fallout From Sarbanes-Oxley Act High on List of Directors' Concerns

Clearly the string of corporate scandals and the rush by Congress to pass the Sarbanes-Oxley Act were foremost in the minds of the panelists who described current issues in corporate governance that companies and boards are facing. Moderator B. Kenneth West noted, "Board members are struggling with fulfilling the new roles mandated by the law. At the same time, there is greatly heightened concern about what the investing public expects in terms of protecting their interests." Mr. West is a senior consultant for corporate governance at TIAA-CREF and former Chairman of the Board of Harris Bancorp.

"The Sarbanes-Oxley Act represents the federal government's reaction to the past year's corporate scandals. While it is far reaching, the Act raises significant new concerns for companies that must implement its provisions," continued Mr. West. After setting the stage, he raised a series of questions for the panel to address.

Q. What is your initial reaction to the Sarbanes-Oxley legislation as you begin to deal with these reforms?

Alfred C. DeCrane, Jr., former Chairman and CEO of Texaco: Despite everything that has happened, the basic principles of what directors do, haven't changed. Boards must, with care and commitment, represent all the owners; not a group of owners, but all of them.

The public perception is that managements are out of control and that boards are not doing their jobs of providing control. The perception is that the problem is broader than a few bad apples.

In response, board members need to do a much better job of telling the public what their board is doing and what they think it should do.

If this information is made publicly available and it is reviewed and measured, boards will do a better job and the public perception c f their role will improve.

John C. Wilcox, Vice Chairman of Georgeson Shareholder Communications: There are widespread concerns that boards of directors, and especially audit committees, are expected to prevent future frauds and corporate financial disasters. It was the whole market system that broke down. No one caught what was happening at companies like Enron--not auditors, not analysts, not rating agencies, not regulators. Yet there is an apparent perception boards are expected to fix the problem.

The business community must be concerned about where the corporate governance movement is headed and whether it has been taken over by the government. Many practices have been codified into law, but there are still other ideas out there for reforming business practices that could present serious problems.

Eric D. Roiter, Senior Vice President and General Counsel of Fidelity Management and Research Company: The Sarbanes-Oxley Act was one of the most poorly drafted laws I have ever seen. Congress has taken a blow-up that happened at one company, Enron, and applied the fix for that one situation to all companies, including mutual fund companies, which are structured differently and operate much differently from industrial firms.

The Act represents a significant intrusion into state corporate law. It essentially repeals the right of the CEO and CFO to delegate authority in such matters as reviewing adequacy of financial controls and ascertaining that financial reports are accurate. In requiring CEOs and CFOs to certify the accuracy of financial statements, the Act dictates the job descriptions of CEOs and CFOs. It would have been preferable if the board of directors were authorized to decide who should do the difficult work of designing internal controls.

Q. How is the role of the board of...