All the more remarkable, then, that the SEC should find itself in its current predicament, having lost not only its chairman, Harvey Pitt, but also its chief accountant, Bob Herdman. Most importantly, the SEC also lost its key appointee to the new Public Company Accounting Oversight Board, William Webster. Probably the single most important question to ask is, what on earth ever prompted anyone at the SEC to suggest that Webster, a man who had been involved on the audit committee of a company now under federal investigation, was the right person to take charge of a new regulator that was specifically established with a view to restoring confidence in corporate America.
Did they take legal advice and be told that “There is no evidence to cause concern”? Did they rigorously examine their checklists and discover that there was no question on which Mr Webster would cause any grief? Or did they just have a common sense by-pass?
We have said in the past that knee-jerk reactions tend to by-pass the brain. The truth of the matter is that there?s nothing very difficult about corporate governance. Yes, the new rules are burdensome and time-consuming and costly. But if you catch yourself asking the question, “Can we spin this?” or “Can we keep this out the press?” then forget it: you?ve traded intelligence for compliance. Our readers know this. But who’s going to tell the SEC?
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