What's today's toughest job?
A) Transcribing cable TV's The Osbournes.
B) Sounding bullish about the Nasdaq.
C) Coaching the Devil Rays.
D) Serving as a corporate director since the Enron debacle.
None of these tasks is a walk in the park. But many business experts who gathered Thursday in Tampa to discuss corporate reforms "in a post-Enron world" would choose Answer D.
It seems the high-pay, short-hour, ethics-deficient, country club life of a corporate director is under attack in the wake of business fraud and accounting tricks epitomized by Enron, WorldCom and dozens of other major and small U.S. corporations.
What took so long? Sure, some directors still do a good job. But literally thousands more joined corporate boards for the perks, prestige and connections. The result? They provide shareholders with about as much independent oversight of their CEO and company as aging lapdogs.
Well, these corporate pooches better get some teeth. Congress approved corporate reform legislation Thursday that sharply increases penalties for fraud and beefs up oversight of accountants. The Securities and Exchange Commission, the New York Stock Exchange, and (belatedly) the Nasdaq are pushing new rules that make directors more accountable for corporate behavior.
Enron's go-along board already is destined for a spot in a Ripley's Believe It or Not! museum. The board became infamous for conducting meetings that were so short in duration that it would have been physically impossible to govern the complex energy trading company.
PricewaterhouseCoopers partner Andy McAdams summed up the laissez-faire culture of boardrooms, pre-Enron, in one sentence.
"The audit committee would meet at 8:15 before the 8:30 board meeting with time for a break in between," he quipped.
But the snooty and lucrative directors scene is well-entrenched. Will anything really change behind those ornate boardroom doors?
Maybe. A bit. Starting Aug. 14, CEOs must personally certify that their corporate books are accurate. Under new rules, CEOs will find it harder to pack their boards with business buddies and easily bullied academics, consultants and minorities chosen just for PR purposes. And CEOs will face harsh scrutiny if supposedly independent directors turn out to be compromised by side deals, extra pay and undisclosed conflicts that erode their ability to govern.
That, at least, is what three panels of experts told about 100 area directors, executives and lawyers attending an afternoon seminar on corporate governance held at the Wyndham Westshore Hotel.
"Until there is a shortage of human beings in the world, there is no reason for choosing people with conflicts to become directors," said panelist Sarah Teslik, executive director of the Council of Institutional Investors and one of the nation's leading proponents of less CEO royalty and more shareholder empowerment. "Good fences make good neighbors, and good structures make good companies."
Indeed, panelist and former Florida Progress CEO Andy Hines acknowledged an invitation to join a board of directors used to be little more than a corporate version of joining an elite country club. And Barry Alpert, a Raymond James & Associates investment banker and a veteran outside director, admitted that only two years ago _ when now-bankrupt telecom giant WorldCom was considered a top corporation _ he would have been "flattered" to join its board.
There but for the grace of God, Alpert said. A WorldCom invitation never came.
Thursday's experts described a harsher world ahead for directors and CEOs, thanks to the current backlash of legislative and regulatory reforms.
Outside directors who are supposed to be independent will need much more "backbone" than was ever needed in the past.
The highly visible arrest on Wednesday of Adelphia chief John Rigas and sons, played over and over on cable TV and captured in newspaper photos, is a scene many business people are not used to seeing, said Russ Alba, a Foley & Lardner lawyer.
On Thursday, the betting was that WorldCom executive Bernie Ebbers would be next to make the parade of handcuffs.
"The orange jumpsuit syndrome may have a powerful effect," Alba said.
We'll see. Over the years, only a few prominent executives who erred have landed in prison. Junk bond king Michael Milken. Savings and loan CEO Charles Keating.
I guess it's tough to squeeze all that royalty into a tiny jail cell.
_ Robert Trigaux can be reached at trigauxsptimes.com or (727) 893-8405.