September 25, 2003

What is the Appropriate Motivation

One aspect of boardroom reform that has not been fully explored is what should be an acceptable motivation for someone who seeks to serve as a director. Historically, directors have agreed to serve principally for the prestige and clublike atmosphere. Some have done it for the money – although this is unlikely the case for those directors that earn big dollars as officers at other companies.

At the recent BRT Roundtable on Corporate Governance, Fannie Mae CEO Franklin Raines explained that he joined Pfizer’s board to enhance his ability to be an innovator – which in turn would benefit his employer. This is an honest and understandable answer – but does it serve the needs of Pfizer’s shareholders to whom he now owes fiduciary duties?

Professional directors are not necessarily the answer as they inevitably take on multiple board seats to earn their livelihood. I’m not sure there is a good answer here. I just know that I serve on a local domestic violence non-profit board to give back to my community (there is no pay involved) – but that “feel good” model doesn’t really fit the public company world.

On, we have posted the transcript from the BRT Roundtable, which included Reps. Oxley and Frank, Hank McKinnell, Dick Grasso, Nell Minow, William Donaldson and others.

But I Live For My E-mail…

Although the news constantly reminds us of the perils of e-mail communications – WSJ reports today that the case against Frank Quattrone hinges on a single email – most lawyers can’t help but use e-mail as their primary mode of communication, both internally within their organization as well as externally with their clients. We have posted an interview with Michele Lange of Kroll OnTrack to further explore Potential E-Pitfalls.

What many of us don’t realize is that some organizations capture every voicemail that is left for one of their employees. These voicemails are archived on disks and stored according to a document retention policy (I guess this is where Comedy Central finds the ideas for “Crank Yankers”). It’s all too scary for someone like me that is addicted to e-mail.

PCAOB Reschedules Consideration of Investigation Rules

Postponed by Hurricane Isabel, the PCAOB will now consider adoption of its investigation, adjudication and registration withdrawal rules on September 29th, right before its Roundtable on Audits and Documentation. All of this will be webcast.

For companies, the investigation rules probably will be among the most important rulemakings the PCAOB conducts – as they will set forth the terms of how independent auditors turn over the records of their clients, etc.