Corporate executives and successful entrepreneurs bring a wealth of business and technical expertise to the boards of directors of companies, but they don't necessarily meet "financial literacy" standards now required by federal regulations and stock exchange rules.

In response, the College of Business and Economics has created a new program, the Delaware Audit and Financial Reporting Institute for Corporate Directors. The institute, part of the College's executive education programs (see article on opposite page), is designed for corporate board members who serve--or expect to serve--on a board's audit committee. Plans are under way for a three-day seminar in the near future.

"Members of boards of directors who don't feel they meet the new financial literacy requirements--they might have backgrounds in marketing or engineering, for example--are looking for a way to become educated so they can fulfill their financial audit responsibilities on their boards," says John Fleming, director of accounting and auditing for the Loscalzo Associates consulting firm, an adjunct professor in the College and a consultant to the institute. "How do you become financially literate? One very meaningful way is to come to an audit institute seminar."

Fleming says the need for such programs became apparent when the independent Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committees issued a report finding that many board members lack adequate financial knowledge. The report recommended that board members with audit responsibilities become knowledgeable about finances, to enable them to better deal with auditors and make decisions about corporate financial policies. The Securities & Exchange Commission and the New York, American and Nasdaq stock exchanges adopted the recommendations, Fleming says.

"It's a fairly basic premise," he says. "You have to have some financial background to fulfill your fiduciary responsibilities as a member of a board of directors audit committee."

Possible topics for upcoming seminars include responsibilities of audit committees, dynamics of internal and external auditing, financial reporting and legal responsibilities. UD's location in a state where so many major companies are incorporated, and whose courts influence so much of the nation's corporate law, is an additional reason board members across the country have shown interest in the institute's plans, Fleming says.

Yet another reason is the Enron collapse and resulting debate about oversight of corporate auditing systems, he says.

To address some of those issues, the College is sponsoring a June 17 seminar, "Accounting, Auditing and Governance After Enron," for alumni and members of the area business and legal communities. Topics include regulatory issues and corporate governance implications of the Enron collapse. For more information, visit the web site [www.audit.udel.edu], or call Paul Mason, (302) 831-6487.

For more information about the Delaware Audit and Financial Reporting Institute for Corporate Directors, see the web site [www.icd.udel.edu], e-mail [icd-audit@udel.edu] or call (302) 831-0171.