The Way it was: 1979.

Advise? Or Decide?

There is a time to advise, and a time to decide. I propose here that neither the personal qualifications of directors, nor the organizational status of the board per se, nor the nature of particular issues should determine this time, but that this time be determined by the presence or absence of basic agreement about the corporate welfare. The board should advise when all is well, and make decisions when all is not. And this notion must be institutionalized to the greatest extent possible at both board and management levels.

  1. Edward Weber, professor of business policy and founding dean of the University of Wisconsin/Milwaukee School of Business Administration, in "Advise or Decide: Corporate Identity Crises and the Director's Decisionmaking Role "[Fall 1979].

Heat Turning Up on the Audit Committee

July 31, 1979 is the "deadline" for comments on the SEC's proposed rules requiring the inclusion of a management statement on internal accounting control in Form 10-K and annual reports. One of the many regulatory progeny engendered by the Foreign Corrupt Practices Act of 1977 (FCPA), the proposal cannot be disassociated from the Act and its complex interpretations. The history of this Act is dramatic, its influence great, so great that no one flurry of SEC proposal responses can set straight any one aspect of it -- least of all management accountability for internal auditing. The responsibility of management (and the board) to survey internal accounting procedures in tandem with external audit activities lies at the heart of the FCPA. And at the heart of that responsibility lies that of the board audit committee members whose tasks are still in evolution.

Robert Holt and Phillip Aldridge of the University of Georgia in "Improving the Audit Function: A Director's Guide to Compliance with the Accounting Provisions of the Foreign Corrupt Practices Act of 1977" [Fall 1979]

A Word about Inside Directors

We can readily agree that the presence of management directors on a corporate board, like the presence of a chairman of the board who is also chief executive officer of the corporation, may create opportunities for dubious management practices that will handicap the corporation in its business transactions, but we have no good reason to agree that barring them will automatically improve managerial decisions.

Rush Welter, historian, in "The American Big Business/Big Government Dialogue" [Summer 1979].

Enlightened Disclosure


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