WASHINGTON -- Major U.S. CEOs complained Tuesday at a high-profile Treasury Department conference about burdens facing corporations in the post-Enron regulatory environment, while an investor advocate warned that business leaders should not lose sight of what matters to investors.
[Editor's Note: Warren Buffett`s 8 Best Investment Picks - Get Them Click Here Now]
"We can't forget where we were five years ago," Ann Yerger, executive director of the Council of Institutional Investors, said at a conference hosted by Treasury Secretary Henry Paulson. "There was a remarkable crisis of confidence ... I fear we're sort of losing touch with that period of time."
Yerger, who was on a panel with Paulson, billionaire investor Warren Buffett and Securities and Exchange Commission Chairman Christopher Cox, said the scandals of the Enron years revealed pervasive failures in boardrooms and among auditors.
She said 2002's Sarbanes-Oxley accounting and corporate governance reforms were targeted at such problems, and she expressed concern about the scope of recent complaints.
Story Continues Below
"It's very important that we not lose sight of investors," said Yerger, whose group represents major pension funds.
Buffett, one of the world's richest men, said corporate America did not shine during the 1990s and is now working through the regulatory crackdown that followed. "It has no choice but to digest what's being served up," he added.
One result has been that managers and directors are increasingly consumed by regulatory process, said Buffett, who is chairman of Berkshire Hathaway Inc.
"We are doing a lot of things that I regard as unnecessary," he said. "It has changed the complexion of things that go on in our boardroom ... Hours and hours get spent on process.
"The process that's gone through detracts from more important issues that a board should be looking at."
General Electric Co. Chief Executive Jeffrey Immelt questioned the role of independent auditors and said their "judgments are no longer necessarily held in high regard."
[Editor's Note: 1200% Gains in 42 Days -- Find Out How]
Paulson said regulatory scrutiny of corporate behavior might have grown so excessive that it threatens market competitiveness. He said Sarbanes-Oxley had produced some positive results, but it was time to reassess them.
The conference brought together luminaries from Wall Street, the corporate world and policy-making, including Citigroup Executive Committee Chairman Robert Rubin and former Federal Reserve Chairman Alan Greenspan.
Paulson, formerly CEO of Wall Street brokerage Goldman Sachs, described U.S. capital markets as "the deepest, most efficient and most transparent in the world."
"Yet we must remain vigilant," he said, "and we must do everything we can to ensure they stay that way."
© Reuters 2007. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters.
Editor's note:
Warren Buffett`s 8 Best Investment Picks - Get Them Click Here Now
1200% Gains in 42 Days -- Find Out How
Get our top 4 ETF recommendations for 2007
The 99 stocks you need to dump in 2007 . . . and the 10 to buy! Get our free report today.
2007: A Year of Financial Reckoning. Get our FREE special report.
