FEI backs NYSE listing reforms. (Advocacy).
In the letter, signed by CCR Chairman Frank H. Brod, the committee applauds the NYSE's efforts "to enhance accountability, integrity and transparency in the financial statements and to restore investor trust and confidence in the market." CCR supports the NYSE recommendation that all equity-based plans should require shareholder approval, calling that "an important check and balance" that would help "restore confidence in company compensation plans."
However, the committee raised issues in several areas:
Expanded audit committee responsibilities: CCR argues that it is "imperative to strike the right balance" between the committee's role and management's. While the audit committee must be proactive, "it cannot serve as a replacement for management or guarantee management's integrity." CCR recommends that the audit committee purpose "should not be extended to include compliance with legal and regulatory requirements," saying those should be fulfilled by the company's general counsel. It also takes issue with the idea that the audit panel should have sole authority to retain and terminate the company's independent auditors, saying that directors and company shareholders should also have a voice.
Audit committee financial expertise: CCR said it does not support the requirement that the chairman of the audit committee have accounting or related financial management expertise. Such a requirement would "create challenges in rotating the position" and in finding qualified individuals, the committee said.
Violations and reprimand letters: The committee argued that while the exchange should have the authority to issue reprimands, "due process" must be adhered to in determining violations -- in part so that investors are properly informed and can make "educated decisions."
To see the letter, click on www.fei. org/finrep/letters/nyse731.pdf.
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|Title Annotation:||Financial Executives International supports New York Stock Exchange Inc. standards|
|Article Type:||Brief Article|
|Date:||Sep 1, 2002|
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