David M. Katz, CFO.com | US
February 4, 2010

Give boards access to real-time information.

Dear SEC Chair Mary Schapiro,

What do Enron, Worldcom and Tyco have in common with Lehman Brothers, Bear Stearns, General Motors and AIG?

The board was blind-sided by fraud and misconduct.

To the board, information is knowledge, and knowledge is power. How can anyone expect the board to oversee management if the executive management team is allowed to filter the information they receive?

The housing bubble began to burst in 2006. Yet it wasn?t until late 2007 when Pricewaterhouse told AIG executives that the company ?could have a material weakness.? Uncertainty about the accuracy of the company?s financial statements weren?t disclosed to investors and the public under SEC rules until 2008.

Even with losses from AIG?s Financial Products mounting, the 2007 year-end filing stated, ?management believes? it could raise the billions of dollars needed to meet ?anticipated cash requirements.?

Yeah, the $180 billion in cash and loans it received from taxpayers just a few months later.

Ms. Schapiro, please slow down and smell the coffee.

Corporate governance reform will remain illusive until public companies are willing to expand their board-level reporting to the audit and corporate governance committees to fully disclose the business practices of the company and its executive management team? Expanding board-level reporting should be provided by an independent third party to prevent the executive management team from filtering the information. Relying on independent outside auditors and consultants is a waste of time if the information isn?t timely.

Posted by Mark Rome | Feb 5, 2010 10:27 AM ET

CEO/CFO Certification on Proxy

Technically, there is a requirement to for the CEO & CFO to sign-off or certify the Proxy Statement. I'm no attorney, but if you prepare Form 10-Ks, see if this makes sense:

Since companies have the luxury to incorporate by reference sections of the Proxy Statement into the Form 10-K, including Executive Pay, (Part III Items 10-14), the CEO & CFO SOX Certifications indirectly cover the meaty part of the Proxy Statement.

Posted by BILL STOREY | Feb 5, 2010 8:19 AM ET