If the stockholders pay an individual $200 million per year, that individual must feel a huge sense of duty to these shareholders, and at those prices it may exceed the cost of violating the CEO's own ethical code with respect to things such as financial statement accuracy, environmental laws, child labor laws, etc. John F. Richards.
Executives said that lawyers were recommending that companies push the responsibility for the accuracy of financial statements further down in the organization.
Michael J. Critelli, the chief executive of Pitney Bowes, agrees with the Securities and Exchange Commission that corporate chiefs should certify the accuracy of financial statements.
This section requires that CEOs and CFOs personally certify the accuracy of financial statements and disclosures in the periodic reports and that those statements fairly present in all material aspects the results of operations and financial condition of the company.
Top executives will continue certifying the accuracy of financial statements and will have to swear that they have applied internal controls to ensure the reliability of the information reported to them.
That is troubling for CFOs, who are at risk both because they sign off on the accuracy of financial statements and because they are often responsible for a company's compliance activities.
The ensuing erosion of public trust prompted a swift regulatory response most notably, the 2002 passage of the Sarbanes-Oxley Act (SOX), which requires companies to institute elaborate internal controls and makes corporate executives directly accountable for the accuracy of financial statements.
The Sarbanes-Oxley Act in 2002 accomplished something with a provision that I thought superfluous, and the council picks up on that by suggesting that chief executives be required to certify that their banks are in compliance with the Volcker Rule, just as the earlier law forces them to certify the accuracy of financial statements.
