Statement of the Commission Regarding Selection Process for Chairperson for the Public Company Accounting Oversight Board (PCAOB)
FOR IMMEDIATE RELEASE
Washington, D.C., March 4, 2003 - The Securities and Exchange Commission today announced that it has adopted a process for conducting an intensive search to promptly select a Chairperson of the five-member Public Company Accounting Oversight Board (PCAOB).
The plan calls for the Chairman, the Commissioners, and the staff to reach out and solicit input from a variety of sources, including key members of Congress, investor advocates, academics, and members of the business community.
"As I said in my testimony before the Senate Banking Committee, the selection of a Chairperson for the Public Company Accounting Oversight Board is my number one priority. I am pleased that my fellow Commissioners and I have been able to build upon the recommendations of the General Accounting Office and quickly devise a thorough and expeditious process to identify and vet potential candidates," said William Donaldson, Chairman of the Securities and Exchange Commission.
Chairman Donaldson went on to say, "I commend Commissioners Glassman, Goldschmid, Atkins and Campos as well as the staff of the SEC for their dedication to establishing a fair and inclusive process, and I look forward to working with them to select an outstanding individual to lead the PCAOB."
The Commission begins this search today by encouraging anyone to nominate interested, qualified individuals by submitting a current resume, a brief (one-page or less) summary of qualifications and names of at least three references by March 14, 2003. Those who were considered during the last search, who remain interested, are also encouraged to communicate their continuing interest.
The SEC staff will incorporate new suggestions, update the list of qualified candidates and circulate it to the members of the Commission. The Chairman and the Commissioners will narrow that list based on the criteria in the Sarbanes-Oxley legislation, additional criteria that the Commission finds desirable, but not mandatory (attached), and the individual's willingness to serve.
Each candidate on the narrowed list will undergo a preliminary vetting process. Upon completion, each member of the Commission will interview the leading candidates and a thorough background review will be completed. Following this review and consultation with the Chairman of the Federal Reserve and Secretary of the Treasury, as required, the Commission will vote to approve the appointment of a Chairperson.
Interested individuals should please send the relevant information by fax to 202-942-9555; by e-mail to firstname.lastname@example.org; or by overnight mail, to the attention of Susan Ferris Wyderko, Director, Office of Investor Education and Assistance, 450 5th Street NW, Washington, DC 20549-0213.
CRITERIA FOR SELECTION OF PCAOB CHAIRPERSON
- Statutory Criteria. Criteria set forth by the Sarbanes-Oxley Act of 2002 as minimum requirements - that the individual:
- Be a prominent individual of integrity and reputation.
- Have a demonstrated commitment to the interests of investors and the public.
- Have an understanding of the responsibilities for and nature of the financial disclosures required of issuers under the federal securities laws.
- Have an understanding of the obligations of accountants with respect to the preparation and issuance of audit reports with respect to such disclosures.
- Has not served two prior terms (whether or not consecutive) on the PCAOB.
- Has not been a practicing CPA for at least five years prior to his or her appointment to the PCAOB. The Board must have two (but no more than two) CPAs.
- Be willing and able to serve as PCAOB Chairperson on a full-time basis.
- Additional Criteria. Criteria that the Commission would consider desirable, although not mandatory, in evaluating a candidate.
- Experience and Related Criteria - that the individual:
- Have experience running a large organization, preferably during the initial or early stage of the organization's existence.
- Be well recognized by those participating in the financial markets and possess a keen understanding of those markets.
- Be independent from any particular constituency.
- Have experience that demonstrates an understanding of the role of auditors in the Commission's financial accounting and disclosure system.
- Have no known impediments or controversies that might impair his or her ability to lead, or the public's ability to rely on the individual to lead, the PCAOB.
- Be willing and able to serve a five-year term.
- Personal Criteria - that the individual possess:
- Intellect and Character - the ability to consider impartially ideas, information, and data from all sources, to seek additional input whenever it appears necessary, and to make timely decisions; the ability to absorb complex information, analyze it objectively, and make rational decisions; and the ability to communicate effectively.
- A commitment to public service and to the PCAOB's mission.
- Awareness of the financial reporting and auditing environment - a broad understanding of the environment in which the PCAOB operates.
- Demonstrated ability to create a collegial working environment - the ability to develop consensus within a group.
- Leadership and respect - demonstrated leadership ability and ability to instill public trust.