Nasdaq's New Corporate Governance
Traders Magazine, April 2002
Feeling the pressure from the Enron scandals, Nasdaq has adopted new ethical standards. Included are expanding shareholder approval of stock option plans, giving more authority to the audit committee, requiring continuing education for all board members and recommending that all Nasdaq companies adopt a code of conduct as a best practice. "Audit committees of Nasdaq companies should, as a best practice, recommend the selection or replacement of each independent auditor," Nasdaq officials wrote in previewing their new standards. Nasdaq also pledged that it would "harmonize" its standards with the controversial fair disclosure (FD) rule. Another rule change would require that, "all stock option plans that include officers or directors must be approved by shareholders.
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