In 2002, the federal government mandated that corporate boards of directors include at least one “audit committee financial expert” to help avert future accounting scandals. But the title and description of that position may have an unintended negative effect on the gender diversity of corporate boards, argues Seletha Butler, assistant professor of law and ethics at Georgia Tech Scheller College of Business.
In her recent lead article in The Georgetown Journal of Gender and Law, Butler describes the creation of this board expert requirement in the passing of the Sarbanes-Oxley Act, which followed a series of serious corporate misdeeds at companies such as Enron and WorldCom. Any company that didn’t add the audit committee financial expert position had to explain why it did not add the position.
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