Une occasion de jouer dans les ligues majeures
After reading the case and according to what I have learned during the course of Ethics and Governance, I think that Alex Krivac must refuse the offer of sitting at the Audit committee of Lasorda Inc. To support my decision I have analysed the attitude of the people involved in the situation and the requirements and recommendations in the field of Governance.
I’ll begin with Louis Verdoni. The way he presented the offer to Alex was extremely informal. An offer to sit at a Board of directors must be in a context very different to the one of an offer to play golf. Louis lacked professionalism and respect for Alex by making the offer over the phone and using informal conversation. Additionally, when Alex asked the implications of being member of The Board of Lasorda, Louis answered with only the “fun parts”: trips to Toronto, meeting at Charlevoix next summer and annual meetings to exotic places. In matters of Governance, being a member of the board of directors and especially, being part of the Audit Committee involves a lot more than fun trips. As Professor Labelle has mentioned in class, «Le comité d’audit a beaucoup sur ses épaules » Y. Allaire and M. Firsirotu stated “Two committees of the board play a critical role…the audit committee and the remuneration/human resources committee.”[i]. The Sarbanes-Oxley Act of 2002 requires the audit committees to be directly responsible for the appointment, compensation, and oversight of the work of the external auditors; … pre-approve any permissible non audit services provided by the external auditors; establish procedures for employee whistle-blowers to submit their concerns regarding accounting and auditing issues;[ii] among others. As we can see the responsibilities that Alex would have at Lasorda’s Committee of Audit would be essential for its governance and not just fun trips as Louis had described it.
Also, Louis listed another advantage of accepting the offer...