A Word From The Advisor

Benjamin Disraeli said that “All power is a trust . . . and we are accountable for its exercise.” As some of the most powerful chieftains in corporate America were led away in chains, whether being brought to account for an ill-advised “exercise of power” or simply hauled into court for breach of fiduciary duty and fraud, it was disquieting indeed to watch some of the architects of the American economic miracle arrested for what amounted to maladroit crimes like theft and cheating.

But it was also gratifying in a morbidly fascinating way. While little has been proved and there are months of plea bargaining and trial transcripts ahead, these arrests offered evidence that the system, however painfully slow for the aggrieved, was working.

The gut wrenching months of accusations and hearings have yielded some positive results. Corporate Chief Executives and Chief Financial Officers have largely met the August 15, 2002 deadline for attesting to the accuracy of their financial statements. Corporate boards are suddenly awake, if they still have jobs at all. Outsiders will soon constitute a larger and more empowered segment of corporate boards, instead of enduring the tokenism and marginalization to which they were previously limited. Perhaps board members will even expend a portion of their compensation on accounting classes from time to time. It couldn’t hurt. In short, it appears that corporate America is cleaning up its act - or at least, being vocal about the fact that they are working on it.