Balancing growth and control: business leaders focus on strengthening corporate governance.

Hundreds of business leaders and corporate executives took part in a seminar to share ideas and offer solutions about how to do business under a new U.S. law that is sure to complicate Mexican corporate affairs.

AMERICAN CHAMBER/MEXICO organized the seminar entitled "A New Era for Corporate Governance," which aimed to help Mexican businesses understand the subtleties and consequences of the Sarbanes-Oxley Act.

The Sarbanes-Oxley Act is a law, signed by the U.S. Congress in 2002, which requires all companies publicly traded in the United States to redesign their accounting and auditing procedures to give shareholders and employees greater confidence in the truth and accuracy of how and where their money is spent.

This means Mexican companies traded publicly in the United States will fall under the legislation's umbrella, as well as subsidiaries of publicly traded U.S. corporations operating in Mexico

More than 300 businesses attended the seminar and nearly 20 representatives from Microsoft, IBM and Sanchez-DeVanny Eseverri, among others, spoke about the importance of instilling a new code of ethics in corporate affairs.

"Why do we need corporate governance?" asked Julio de Quesada, corporate director at Banamex. "Because the scandals of Enron and WorldCom brought forth evidence that the laws and practices of governance are not sufficient."

In an impassioned speech, de Quesada said executives of Mexico's largest corporations must set new ethical standards so their employees will "no longer take things beyond their limits. We hear of corporate leaders turning debt into profit; how does that work?"

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Approaching a sermon at times, de Quesada told Mexican business leaders "if there is no standard of ethics from above, there will be no permeation to employees below."

In what may have seemed obvious before the corporate scandals of the early millennium eroded public faith in corporations, de Quesada told the crowd "I see no contradiction between doing business and following the rules. There must be a balance between the growth of business and the control of it."

Business leader after business leader struck a similar chord, repeating the mantra that the U.S. law should inspire Mexican businesses to reassess corporate practices in their own country.

Jonathan Davis, president of the National Banking and Securities Commission (Comision Nacional Bancaria y de Valores), told the audience in the keynote address that he expected Mexico's Congress to pass updated legislation to the Stock Market Law (Ley de Mercado de Valores).

The new legislation would implement many of the statutes and bylaws of Sarbanes-Oxley, but would stop short of levying similar stiff fines and jail time for corporate executives if found guilty of deceit or fraud in their financial statements.

In a speech that sounded optimistic about the salutary effects the new legislation would have on Mexican corporate governance, Davis called for more transparency in the flow of money.

"With the help of all investors," Davis said, "we are convinced that good laws with transparency are the key to gaining the confidence of investors and the base for developing Mexico's stock market."

Graham Gori is a freelance journalist based in Mexico City.