{"id":36534,"date":"2008-03-26T16:35:41","date_gmt":"2008-03-26T21:35:41","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/uncategorized\/corporate-governance-seminar-seminar-summary-of-richard-langan.html"},"modified":"2008-03-26T16:35:41","modified_gmt":"2008-03-26T21:35:41","slug":"corporate-governance-seminar-seminar-summary-of-richard-langan","status":"publish","type":"corporate","link":"https:\/\/corporate.findlaw.com\/litigation-disputes\/corporate-governance-seminar-seminar-summary-of-richard-langan.html","title":{"rendered":"Corporate Governance Seminar. Seminar Summary of Richard Langan of Nixon Peabody LLP"},"content":{"rendered":"<section class=\"fl-gutenberg-byline\">\n    <div class=\"fl-gutenberg-byline-content\">\n                    <p><em>This article was edited and reviewed by <a href=\"https:\/\/www.findlaw.com\/company\/our-team.html\" rel=\"noopener\">FindLaw Attorney Writers<\/a><\/em><\/p>\n\n                | Last reviewed\n        <time>\n                            May 15, 2026\n                    <\/time>\n    <\/div>\n\n    \n    <details class=\"fl-gutenberg-byline-toggle fl-gutenberg-byline-legally-reviewed\">\n        <summary>\n            <i class=\"fl-gutenberg-byline-icon\" aria-hidden=\"true\"><\/i>\n            Legally Reviewed\n        <\/summary>\n\n        <div class=\"fl-gutenberg-byline-toggle-content\">\n            <p><em>This article has been written and reviewed for legal accuracy, clarity, and style by <a href=\"https:\/\/www.findlaw.com\/company\/our-team.html\" rel=\"noopener\">FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with <a href=\"https:\/\/www.findlaw.com\/company\/company-history\/editorial-policy.html\" rel=\"noopener\">our editorial standards<\/a>.<\/em><\/p>\n\n        <\/div>\n    <\/details>\n\n    <details class=\"fl-gutenberg-byline-toggle fl-gutenberg-byline-fast-checked\">\n        <summary>\n            <i class=\"fl-gutenberg-byline-icon\" aria-hidden=\"true\"><\/i>\n            Fact-Checked\n        <\/summary>\n\n        <div class=\"fl-gutenberg-byline-toggle-content\">\n            <p><em>The last updated date refers to the last time this article was reviewed by FindLaw or one of our <a href=\"https:\/\/www.findlaw.com\/company\/our-team\/contributing-authors.html\" rel=\"noopener\">contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please <a href=\"https:\/\/lawyers.findlaw.com\/?fli=bylinelink\" rel=\"noopener\">contact an attorney in your area<\/a>.<\/em><\/p>\n\n        <\/div>\n    <\/details>\n<\/section>\n\n\n\n<div class=\"rxbodyfield\" xmlns:o=\"urn:www.microsoft.com\/office\" xmlns:st1=\"urn:www.microsoft.com\/smarttags\" xmlns:w=\"urn:www.microsoft.com\/word\" xmlns:x=\"urn:www.microsoft.com\/excel\"><table align=\"right\" border=\"0\" cellpadding=\"12\" cellspacing=\"0\" width=\"50%\"><tr><td align=\"&#39;center&#39;\"><a href=\"&#39;http:\/\/www.nixonpeabody.com&#39;\" target=\"&#39;_blank&#39;\"><img decoding=\"async\" border=\"&#39;0&#39;\" src=\"&#39;https://corporate.findlaw.com/static/f/images\/corporate\/firms\/nixonpeabody\/logo.gif&#39;\"\/><\/a><\/td><\/tr><tr><td><blockquote><ul><li><a href=\"&#39;http:\/\/www.nixonpeabody.com&#39;\" target=\"&#39;_blank&#39;\">Nixon Peabody LLP<\/a><\/li><li><a href=\"&#39;http:\/\/www.townsend.com\/attorneys\/biodetails.asp?o=3303&#39;\" target=\"&#39;_blank&#39;\">Richard F. Langan, Jr.<\/a><\/li><\/ul><\/blockquote><\/td><\/tr><\/table><p>With regard to the &quot;Pre-Approval&quot; requirement transitional rules (section 202), Mr. Langan noted:<\/p><ul><li style=\"list-style: none\"><p\/><\/li><li>Audit services that are subject to engagements in effect before May 6, 2003 do not need to be approved.<br\/><br\/> <p\/><\/li><li>Permitted non-audit services subject to engagement before May 6, 2003 can continue, but need to be pre-approved before May 6, 2004.<br\/><br\/><\/li><\/ul><p>Further, Mr. Langan advised companies to adopt policies and procedures for pre-approval of audit services and non-audit services, and to assess problematic services on a case-by-case basis. In adopting policies and procedures, the first step is to inventory audit and non-audit services being undertaken by a company&#195;&#173;s auditors, and look at the costs associated with each service item. Next, the company should determine the technique to use for pre-approval of services: by broad category of services, services up to certain dollar limits, services with regard to time periods, or a combined approach.<\/p><p>Whatever the approach, preapproval polices and procedures must have some specificity attached to them, so that one can clearly say that services were pre-approved in accordance with the rules. Some pre-approval issues worth noting, according to Mr. Langan:<\/p><ul><li style=\"list-style: none\"><p\/><\/li><li>Companies must examine tax services closely, especially where potential tax avoidance is associated with services.<br\/><br\/> <p\/><\/li><li>Though a de-minimus exception exists with regard to pre-approval of audit and non-audit services, it is available in such a narrow set of circumstances that, if at all possible, companies should not rely on the exception.<br\/><br\/><\/li><\/ul><p>According to Mr. Langan, the audit committee &quot;Financial Expert&quot; requirement is fairly straightforward. Only one requirement for service as a financial expert on an audit committee is potentially problematic, especially for smaller companies: the requirement that the expert have experience preparing, auditing, or evaluating financial statements of companies with comparably complex accounting issues.<\/p><p>With regard to the prescribed means of a financial expert&#195;&#173;s experience or education, Mr. Langan explained that the &quot;other relevant experience&quot; category must be listed and described in the proxy statement if it is relied upon. One way to address this requirement in a way that avoids a large number of SEC comments is to include in the audit committee charter those attributes that would be viewed by the company&#195;&#173;s audit committee as satisfying the requisite level of experience and expertise.<\/p><p>As to independence of the audit committee, Mr. Langan pointed out several issues that arise:<\/p><ul><li style=\"list-style: none\"><p\/><\/li><li>&quot;Family members&quot; are now described more broadly, and it has become harder for companies to do due diligence before reaching out to potential audit committee members with respect to &quot;in-laws.&quot;<br\/><br\/> <p\/><\/li><li>Smaller companies may have problems with the &quot;affiliated person&quot; aspect of the rules, and in determining whether transactions involving VC funds constitute compensation.<br\/><br\/> <p\/><\/li><li>When using retired executives on audit committees, it can be difficult to determine whether they qualify as independent if they are still receiving benefits under defined benefit plans.<br\/><br\/><\/li><\/ul><table border=\"0\" cellpadding=\"5\" cellspacing=\"0\"><tr><td><a href=\"&#39;http:\/\/www.townsend.com\/attorneys\/biodetails.asp?o=3303&#39;\" target=\"&#39;_blank&#39;\"><img decoding=\"async\" border=\"0\" height=\"70\" src=\"https://corporate.findlaw.com/static/f/images\/corporate\/firms\/nixonpeabody\/rlangan.gif\"\/><\/a><\/td><td><i><small>Richard Langan, Business Practice Group Leader at Nixon Peabody LLP, shared his insights on counseling the audit committee with attendees of FindLaw&#195;&#173;s Corporate Governance seminar in New York. Mr. Langan observed that although corporate governance rule-making in light of Sarbanes-Oxley has taken some time for companies to synthesize, most companies have found that the changes can be incorporated into dayto- day activities at the board and audit committee level.<\/small><\/i> <\/td><\/tr><\/table><\/div>","protected":false},"excerpt":{"rendered":"<p>With regard to the &#8220;Pre-Approval&#8221; requirement transitional rules (section 202), Mr. Langan noted: Further, Mr. Langan advised companies to adopt policies and procedures for pre-approval of audit services and non-audit services, and to assess &#8230;<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_categories":[6522,6524,6529,6520,6530],"class_list":["post-36534","corporate","type-corporate","status-publish","hentry","corporate_categories-litigation-disputes__civil-litigation","corporate_categories-litigation-disputes__civil-litigation__civil-procedure","corporate_categories-litigation-disputes__criminal-litigation","corporate_categories-litigation-disputes","corporate_categories-litigation-disputes__criminal-litigation__other-business-crime"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate\/36534","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=36534"}],"wp:term":[{"taxonomy":"corporate_categories","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_categories?post=36534"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}