In 2002, new standards of corporate governance were legislated by the US Congress and made into rules by the SEC. In 2003, companies will comply with some of those rules and continue volunteering their own corporate governance and accounting reforms.
In 2002, GE was one of the first companies to announce major corporate governance changes that went further than Sarbanes-Oxley in a number of ways, such as aiming for a two-thirds independent board. In 2003, more companies will come forward espousing corporate governance changes that push the Sox envelope.
In 2002, Regulation Fair Disclosure saw its enforcement cases and IROs had a flashback to 2000 when Reg FD was the word of the day. In 2003, Secure Computing Corp, Siebel Systems and Raytheon will settle their cases and no IRO will ever forget to webcast again or feel shy about telling their CEO to shut up.
In 2002, WorldCom, Enron, Tyco, Global Crossing, Xerox, Halliburton, Bristol-Myers Squibb, Qwest Communications, Adelphia Communications, Dynegy, ImClone Systems, Harken Energy and others gave corporate accounting a bad name. In 2003, the world’s main accounting standard setters – the IASB and FASB – will issue a slew of new proposals and final rules.
In 2002, a few companies like Amazon.com went ahead and increased their accounting transparency in direct response to their peers’ devious tactics. In 2003, a lot more companies will increase accounting transparency as the drive for ‘plain numbers’ continues.
In 2002, after six months on the warpath of corporate reform, SEC chairman Harvey Pitt resigned on interim election night in the US. In 2003, President Bush will nominate a Republican-friendly somebody (or hopefully already has) to succeed Pitt.
In 2002, shortly after being nominated and following a brief investigation, former CIA and FBI director William Webster stepped down as head of the new public accounting oversight board. In 2003, the accounting board will likely get a new leader.
In 2002, European issuers raised hell over Sarbanes-Oxley’s inclusion of US-listed foreign issuers under its legislative umbrella. In 2003, we’ll see if the new SEC chairman will pick up Pitt’s lead and give foreign issuers reprieve on some of these new rules.
In 2002, sell-side analysts were dragged through the mud; there were oh-so-telling e-mails about child daycare and so on published for all to see and once questionable ties to investment banking revealed as blatant bribes. In 2003, independent research firms will see a sudden boom in business, as big sell-side firms clamor to buy their reports.
In 2002, IROs saw budgets slashed, support staff cut, option packages deflated and pressures increased. In 2003… Hey! Life can only get better from here.
