ICI Addresses NASD Measures to Enhance Independent Directors' RoleWashington, DC, April 22, 2003 - The Institute supports measures proposed by the NASD to improve corporate governance standards by enhancing the role of independent directors on board committees. In a recent comment letter, the Institute addresses several issues raised by the proposal, including: - the standard used to determine an investment company director's independence;
- the procedures for nominating independent directors; and
- the board of directors' responsibilities regarding executive compensation.
The Institute also commented on provisions of the proposal relating to audit committee members. NASD's proposal would require that audit committee members be able to read and understand fundamental financial statements at the time they join the board rather than obtaining these qualifications within a reasonable period after joining the board. The Institute believes that this provision would enhance the effectiveness of audit committees, but suggests that NASD modify its proposal so as to harmonize with any new audit committee responsibilities under recently adopted Rule 10A-3.
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