When crisis meets opportunity. (President's Page).

FEI's El's goals include promoting ethical leadership and restoring investor confidence in our financial markets. Financial executives have a unique role in setting the ethical culture within their organizations. Tone at the top is clearly important. As we witnessed with Enron, which had a robust code of ethics, if the leadership does not embody the code, the culture of the entity as a whole will not embrace it.

While tone at the top is imperative, having systemic checks and balances to ensure appropriate behavior is no less important. FEI has an active Ethics and Eligibility Committee, comprised of volunteer FEI members, which recently worked with the FET staff to update the Code of Ethics that every FEI member is required to sign. The code is now compliant with the new SEC rules, and details principles that members are required to adhere to and embody within their organizations. The new code is repeated here:

All members of FEI will:

* Act with honesty and integrity, avoiding actual or apparent conflicts of interest in personal and professional relationships.

* Provide constituents with information that is accurate, complete, objective, relevant, timely and understandable.

* Comply with applicable rules and regulations of federal, state, provincial, and local governments, and other appropriate private and public regulatory agencies.

* Act in good faith, responsibly, with due care, competence and diligence, without misrepresenting material facts or allowing one's independent judgment to be subordinated.

* Respect the confidentiality of information acquired in the course of one's work except when authorized or otherwise legally obligated to disclose. Confidential information acquired in the course of one's work will not be used for personal advantage.

* Share knowledge and maintain skills important and relevant to constituents' needs.

* Proactively promote ethical behavior as a responsible partner among peers, in the work environment and the community.

* Achieve responsible use of and control over all assets and resources employed or entrusted.

* Report known or suspected violations of this Code in accordance with the FET Rules of Procedure.

* Be accountable for adhering to this Code.

We also have a sample code on our Web site for companies to emulate. I encourage all of you to instill the Code of Ethics into your organizations, whether required to or not.

Most recent accounting scandals stemmed from bad behavior and a lack of appropriate governance and systemic checks and balances. The resulting lack of trust has eroded investor confidence, and we've seen how it has brought down companies. We have also learned that we cannot rely on our auditors to do the dirty work for us. We need to rededicate ourselves to being the corporate watchdogs over the financial statements.

You can't legislate good behavior, and in fact, many of the actors involved in the scandals over the last 18 months or so simply didn't follow the rules spelled out for them. For example, my pet peeve involves WorldCom Inc., which didn't follow basic accounting rules. It put expenses on the balance sheet. I remember working for a competitor at the time and being chastised by analysts for not spending as much as WorldCom on network infrastructure and for having a higher cost structure. No one anticipated that what WorldCom was doing was all fictional, yet decisions were made based on this fictional information.

EEI is working to encourage and motivate members to actively promote a proper and ethical culture in their organizations. We need to set standards, and be part of the solution. We need to regain trust in order to regain investor confidence in our reporting. That starts with honest, ethical business leaders. It's also important to promote intellectually honest accounting standards (i.e., accounting policies that reflect the economics of the underlying transactions), as well as transparency in reporting.

We are providing tools to help members set up the right checks and balances within their organizations. In addition to the sample Code of Ethics, our Web site has a plethora of information on other internal control and governance issues. It has never been more important for financial executives to take the lead in this regard. The Chinese symbol for crisis is the same as that for opportunity -- let's seize this opportunity and make a difference.

Transparency in reporting starts at home. FET will be posting our specific goals on our Web site for the fiscal year ending June 30, 2004. We will also be periodically posting our progress toward those goals, and I encourage all of you to tell me where you think we are. My e-mail address is [e-mail].