Chair White Stresses Audit Committee Commitment and Experience

SEC Chair Mary Jo White recently expressed concerns about audit committee members serving on multiple boards as well as their qualifications. Ms. White worries about “the amount of work required of some audit committees” and whether directors can effectively serve multiple boards and multiple audit committees. She also wants independent directors to have experience relevant to the companies they serve, arguing that experience in one industry may not transfer to another industry. She admonished companies to “carefully choose who serves on their audit committee, selecting only those who have the time, commitment, and experience to do the job well.”

OUR TAKE: Expect the SEC to focus on audit committee experience and time commitment when investigating financial statement and disclosure cases.