This summer, the Sarbanes-Oxley Act took the matter of independence a step further, in the case of publicly traded firms, by incorporating specific requirements of independence into law. For example, all members of a company’s audit committee must now be outside directors. Moreover, at least one of those committee members should be a so-called financial expert. If not, the firm must disclose why not.
Europe is faced with a pivotal decision on how a stability union is to be preserved, and has to engage in a public debate on precisely the politically unpleasant questions. As in monetary policy, responsible action also means heeding the lessons of the past and not repeating earlier mistakes – especially in times of upheaval. This message may appear simple, perhaps even dull.