BRT cautions on hasty legislative reactions to Enron problems

By the OGJ Online Staff

HOUSTON, Feb. 11 -- The Business Roundtable, an association of CEOs of leading corporations, said it is updating its corporate governance recommendations to deal with many of the issues under discussion in the wake of the Enron Corp. collapse.

It has called some activities by Enron Corp.'s management "unacceptable." However, it added in reference to the US corporate governance and financial reporting systems, "The collapse of the Enron Corp. is a profound and troubling exception to the overall record of success. Other less dramatic exceptions may also exist among the thousands of United States public corporations -- but they are exceptions in systems that have generally worked very well.

"Many proposals will no doubt be offered to create new regulations or laws to deal with what appear to be breaches of trust and failures of responsibility at Enron. We must all take care that responses to the unusual circumstances presented by Enron do not inhibit US public corporations' ability to compete, create jobs, and generate economic growth. The Business Roundtable is reviewing corporate governance principles and procedures and will work closely with policymakers to help ensure that any necessary changes to laws and regulations are effective and efficient," it said.

The BRT's guiding principles of corporate governance call for consistency, ethical dealings, fairness, especially when dealing with employees, and competence on the part of directors, management, and accounting firms.

It concluded: "These responsibilities, and others, are critical to the functioning of the modern public corporation. No law or regulation alone can be a substitute for the voluntary adherence to these principles by corporate directors and management and by the accounting firms retained to serve American corporations."