Academic Health Center Leaders Should Address Corporate Governance; Association of Academic Health Centers Issues Recommendations

5/18/2004

From: Elaine R. Rubin of the Association of Academic Health Centers, 202-265-9600; Web: http://www.ahcnet.org

WASHINGTON, May 18 -- The Association of Academic Health Centers (AHC) today released recommendations on the Sarbanes-Oxley Act for academic health center leaders, calling on CEOs of these institutions to be proactive in addressing corporate governance and implement concepts and practices suggested by the Act. The AHC called for continued vigilance to support and ensure integrity, quality, high performance, value, and public accountability in all aspects of academic health center business.

The Sarbanes-Oxley Act, considered by most observers to be the single most important piece of legislation affecting corporate governance, financial disclosure, and the practice of public accounting since the 1930s, is changing the business environment and serving as a catalyst for change in both the private and public sectors.

While not directed at non-profits, the AHC notes that the law provides examples of best practices for all institutions. The AHC recommends practices related to leadership, the composition of boards of directors, audits, and checks and balances within academic health center operations.

Among its recommendations, the AHC calls on academic health center leaders to: promote a culture of integrity and ethical values in business practices; pay attention to the composition and disposition of the board of directors; ensure that members of the board of directors serving on audit committees have the competency to understand financial statements, evaluate accounting company bids to undertake auditing, and make sound financial decisions; and consider internal audits to assess processes, to reveal weak points of performance or accountability, and to install new processes to respond to an evolving compliance environment.

"Ultimately the public wants all institutions to be accountable," says Roger J. Bulger, MD, president of the AHC. "We are recommending that institutions continue to take steps to focus on ethical practices in governance and public credibility as significant ways to ensure institutional viability and well being."

The Association of Academic Health Centers is a national, nonprofit organization dedicated to improving the health of the people by advancing the leadership of academic health centers in health professions education, biomedical and health services research, and health care delivery.