Corporate Governance Positions: The Board: 

Committee Qualifications

 

Director Qualifications

Position: The interests of shareowners are best served by a board with members who have the diversity of talent, knowledge, and relevant expertise to oversee the workings of the company, and the commitment to act on behalf of shareowners.

Rationale: These qualifications will help ensure that the board is not only qualified but recognize the interests of those they serve.

Where stated: USAC on Director Nominations

 

Board’s Financial Literacy

Position: All board members should be financially literate, though not necessarily a financial or accounting professional.

Rationale: Financial literacy will help ensure that the board understands the financial statements presented to them by management and, where appropriate, ask relevant questions.

Where stated: AIMR - NYSE Listing Stds

 

Need for Financial Literacy on the Audit Committee

Position: Members of the committee overseeing auditors and auditor activities should possess a considerable, if not through and in-depth, understanding of financial reports and the auditing process.

Rationale: Financial literacy is needed to ensure that committee members understand the fundamentals of finance and accounting so that they understand the implications of accounting decisions and the financial statements and can ask relevant questions of management and the independent auditors

Where stated: USAC Audit SC - Audit Oversight; CAC - CSA Audit Committees

 

Chartered Financial Analysts as Financial Experts

Position: Regulators should recognize individuals holding the Chartered Financial Analyst ® (CFA ®) designation as meeting the standard of financial expert for audit committees.

Rationale: CFAs have sufficient training in accounting, finance, economics, investment management, ethics, and financial statements analysis to adequately perform the function of financial expert.

Where stated: CAC - CSA Audit Committees