Sarbanes-Oxley (Sarbanes-Oxley news) has been interpreted by some as a definitive move toward the federal government having more influence over corporate governance. Some find that troubling. Others say it is necessary. In any case, it's fair to say that the financial reform bill that just might pass before July 5 will have a lot of implications for governance processes. So the trend continues.

According to the Association of Corporate Counsel, the bill will likely require companies to include, in proxy material, executive compensation information and a nonbinding shareholder resolution to approve the executive compensation. The Senate version has a clawback policy that would appear to go beyond Sarbanes-Oxley Section 303.

In addition, the law will likely require compensation committees to be comprised of independent directors only and to be able to hire their own consultants. There are a lot of other requirements regarding consultant disclosures, internal pay disclosure, comparisons of CEO pay to financial performance and the like. So boards will have plenty to deal with going forward. The time to prepare is now. 

For more:
- here's a rundown

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