NYLEX Benefits - Corporate Governance

Corporate Governance

As a result of recent headlines about alleged corporate abuse involving executive compensation, both public and private companies are facing increasing demands from investors, lenders, auditors, advisors and management for greater transparency and improved reporting. In addition, the Sarbanes-Oxley Act of 2002 mandated increased corporate disclosure and imposed new standards of accountability for public companies generally. Together, this public outcry and these new rules are impacting nearly every element of board governance, from the role of auditors to how executive compensation is determined.

While Sarbanes-Oxley and SEC regulatory changes have created new standards of corporate governance for public companies, private companies and non-profit organizations are not immune from these new best practices. Increasingly, private enterprises are adopting and implementing sound corporate governance policies to ensure the integrity of their business operations. Some of the critical new corporate governance rules and best practices that many commentators have suggested should apply to private boards include:

• New and significant levels of director independence
  The board of directors should include independent and non-employee directors. This is a significant change for private companies that may be accustomed to restricting board membership to executive management, friends and family.
• Increased levels of director responsibility and due diligence
  Directors should be informed and have financial knowledge of the company.
• Established, written codes of business conduct and ethics
  Private companies should create written codes of conduct that provide guidance to the ethical operation of the business.

Both public and private companies are working to meet the more rigorous corporate governance standards now expected of them. Compensation of executives is one of the areas where good corporate governance practice is essential. NYLEX Benefits continues to assist businesses in structuring and implementing executive benefit programs that are designed to motivate key employees, reward performance and comply with appropriate business and corporate governance standards.

For more information, see Rei-Source Management System™.