Corporate Accountability: A Time for Reform
Highlights
GAO discussed legislation Congress passed providing $70 billion in loans to shore up the Federal Deposit Insurance Corporation's Bank Insurance Fund. GAO noted that: (1) the legislation requires federal bank regulators to more timely deal with problem banks before they deplete bank capital; (2) real corporate accountability is impossible without a board of directors that is independent of management and willing to act on its own authority; (3) strong internal controls are essential to protect a company from fraud and abuse, and procedures to ensure compliance with laws and regulations should be routine in every corporation; and (4) in order to comply with laws and regulations, it is critical that management and its lawyers and auditors establish and implement sound compliance programs for any financial institution or corporation.