On Tuesday, February 10th, Treasury Secretary Timothy Geithner outlined a comprehensive plan to restore stability to our financial system. In the address, Secretary Geithner discussed the Obama Administration’s strategy to strengthen our economy by getting credit flowing again to families and businesses, while imposing new measures and conditions to strengthen accountability, oversight and transparency in how taxpayer dollars are spent.
Treasury has taken a number of steps to stabilize U.S. financial markets and the banking system, including injecting billions of dollars in financial institutions. Through the capital purchase program (CPP)a preferred stock and warrant purchase programTreasury provided more than $150 billion in capital to 52 institutions as of November 25, 2008. GAO recognizes that TARP has existed for less than 60 days and that a new program of such magnitude faces many challenges, especially in this current uncertain economic climate.
To ease the burden on Treasury and to make it clear precisely which questions remain to be answered, the Panel has constructed a grid with its original questions and Treasury’s responses. Although many questions remain outstanding, the Panel highlights four specific areas that it believes deserve special attention:
(1) Bank Accountability.
(2) Transparency and Asset Evaluation.
It is highly unlikely that you would purchase a car without a speedometer. Nor would you board an airplane if you knew the instruments weren’t working. Yet we have seen organizations of all types operating without this kind of basic information on their speed, direction and other critical indicators. Many also don’t have insight into their operating and financial performance until long after they close the books, and even then they often have doubts about the accuracy and usefulness of this historic information.
Talk to any security vendor or expert and he or she is bound to have a view on GRC. Interestingly, all these views are divergent and inconsistent. Many view it as a technology play, while others think of it as a business process endeavor. In reality, an effective GRC strategy consists of the right blend of people, processes and technologies working together in harmony.
BTQ, Q 2008
The Harvard Law School Corporate Governance Blog is sponsored by the Harvard Law School Program on Corporate Governance. The Program seeks to facilitate research and public discourse about corporate governance.
Our weblog will provide updates on working papers, seminars, speakers, and other activities sponsored by the Program.
OCEG, Open Compliance & Ethics Group, Principled Performance, Driving Principled Performance, LeanGRC, GRC360 are trademarks of the Open Compliance and Ethics Group. No license is granted for their use beyond this site.