I have been a member of the boards of directors of several companies whose securities are publicly held and chairman of the audit committees of those companies. The proposed rule would be welcome in an area of deep concern to many board members.
Definitions are particularly poor with respect to illegal acts.
The potential for conflict between a board and management over illegal acts is significant. The board, not only the auditor, should make a judgement as to the materiality of illegal acts. The auditor may make his own judgement and be required to act on it. I urge the Commission to examine the role, responsibilities and powers of independent directors with a view towards improving the power to match the apparent responsibilities.