News & Insights

Directors Governance Center

July 10, 2014

A Few Things Directors Should Know About the SEC


Securities and Exchange Commission Chair Mary Jo White recently gave a speech at the 20 th Annual Stanford Directors College hosted by the Stanford University Rock Center for Corporate Governance. The speech was titled A Few Things Directors Should Know About the SEC. Following a brief overview of the structure of the SEC, the speech focused on three topics:

*Directors as Essential Gatekeepers: White emphasized the key role directors play in overseeing their companies and monitoring for violations of securities laws and urged directors not to shy away from asking the difficult questions. She also encouraged directors to regularly engage with their companys regulators and shareholders.

*Self-Reporting and Cooperation: White acknowledged that no matter how rigorous a companys compliance program is, violations can still occur. She stressed that self-reporting of wrongdoing and cooperation with the SEC in investigations weigh on their decisions when considering enforcement actions. Sincere and genuine cooperation may result in a reduced penalty.

*The SEC Whistleblower Program: White explained that the current whistleblower program (established under the Dodd-Frank Act) is set up to encourage whistleblowers to work within a companys own compliance procedures prior to coming to the SEC. She also highlighted that the program provides the SEC with expanded powers to punish companies that retaliate against whistleblowers.

White closed by stating that an engaged and committed director community is key to maintaining the strength of the U.S. capital markets in the world. To read the full address, click here.

This posting was co-authored by Randall Robinson, a student at StanfordLaw School, who is a summer associate at King & Spalding.