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The board of directors is responsible for protecting the interest of the shareholders. When the board makes decisions they adversely affect the company and they also affect the shareholders and company employees. Here is what the board of directors must comply with following the Enron scandal and the Sarbanes-Oxley act of 2002.

Restructure the directors and audit committees so that the requirements in the Sarbanes-Oxley Act of 2002 are met. Study the revised corporate governance policies and ensure that the same are met in the best possible way. Make certain that the role of any company player does not bring conflict of interest to the company policies and actions. Make sure that the management performance and compensation does not compromise the interest of the company. Give shareholders direct input to the corporate governance measures in place in the company.

Educate board members of the responsibility they have towards the shareholders.
It is recommended that having a majority of truly independent directors can benefit the organization and its performance in the CPA Journal of March 2004. A director may not have any material relationship with a company that compromises the independence clause. Both the NYSE and NASDAQ recommend the same measures regarding the board of directors.

We thus see that the Enron debacle was an eye opener for corporate America and bought about accounting reforms, audit committee changes, board of directors' regulations, security analyst recommendations, etc. The Sarbanes-Oxley Act of 2002 led in the implementation of changes following Enron. New York Stock Exchange and NASDAQ underwent reform for listed companies which were approved by the Securities and Exchange Commission.

Now a major public relations drive is underway to mend the reputations of disgraced banks and accounting firms. The invaluable lessons from Enron have humbled corporate America to bring reforms to improvise upon the past. Hopefully it will be able to keep such scandals from erupting again and ensure the protection of the investors and the employees that are disconnected from the management and the board of directors in large organizations. Enron, WorldCom and Xerox are the past Sarbanes-Oxley, NYSE and NASDAQ reforms are the future.

REFERENCES

http://www.aflcio.org
Jickling, Mark (2002) CRS Report for Congress: The Enron Collapse An Overview of Financial Issues
http://www.camagazine.com
http://www.sarbanes-oxley-forum.com/
http://www.pwc.com
http://www.insidesarbanesoxley.com/
http://www.theiia.org/
Bard, Lawrence (2002) SecMail Fried, Frank, Harris, Shiver and Jacobson.
Powers, William; Troubh, Raymond and Winokur, Herbert (2002) Report of investigation.
http://www.nysscpa.