TheCorporateCounsel.net

The Commission has announced the agenda and participants for the upcoming Internal Controls Roundtable, to be held next Wednesday, April 13. The Roundtable will be an all-day affair, from 9 to 5:30. It is open to the public and will also be webcasted. More information on the Roundtable is available.

Sarbanes-Oxley, UK Style

Portions of the United Kingdom’s Companies (Audit, Investigations and Community Enterprise) Act 2004 went into effect this week, placing U.K. companies under stricter auditing controls in an effort to improve the reliability of financial reporting and the independence of auditors. The Act also aims to strengthen the powers of company investigators.

The main requirements of the Act are:

• requiring directors to state in the Directors’ Report that they have not withheld any relevant information from their auditors and giving auditors rights to information from employees as well as officers – failure to comply is a criminal offense, including making a false statement in the Directors’ Report;

• requiring companies to publish details of non-audit services provided by their auditors;

• imposing independent auditing standards, monitoring and disciplinary procedures on the professional accountancy bodies; and

• strengthening the role of the Financial Reporting Review Panel in enforcing good accounting and reporting.

J&J Calls Out the Competition

As Mark Borges notes in his The Compensation Disclosure Blog on CompensationStandards.com, Johnson & Johnson took their competition to task over non-disclosure of aircraft perk amounts. As noted in J&J’s March 15 definitive proxy:

“many other peer corporations require their chairman and certain other executive officers to use company aircraft for personal as well as business travel. As a result, at those corporations, personal use of company aircraft by the chairman and those other executive officers is not treated as a perquisite or personal benefit and the costs associated with such personal use of company aircraft are not reported in the proxy statement. The Company has not required the chairman and other executive officers to use corporate aircraft for personal travel. Mr. Weldon is taxed on the imputed income attributable to personal use of company aircraft and does not receive tax assistance from the Company with respect to these amounts.”

In the words of Alan Beller (in his 10/20/04 speech at our Executive Compensation Conference): “simply stating that company executives must always fly in company planes (or drive in company cars, or accept any other benefit) for security reasons does not relieve a company from considering whether these benefits are perks.” There is more in the “Airplane Use” Practice Area on CompensationStandards.com. Maybe next year, J&J will name names!

-Posted by Julie Hoffman