Nearly 120 students crowded into the brimming Lauder-Fischer Auditorium yesterday to hear Stanley Gold -- a former Walt Disney Co. board member who is now leading a highly visible campaign to oust Disney Chairman and Chief Executive Officer Michael Eisner -- speak on the subject of corporate governance.
A roughly evenly split audience of undergraduate and MBA students was particularly interested in Gold's thoughts on Disney.
"This is a historic moment for the company," second-year MBA student Todd Martin said about his reasons for coming.
Wharton senior Aaron Wasserman agreed.
"The impending takeover [by Comcast Corp.] is a pretty hot topic," Wasserman said. "It's a pretty interesting governance issue."
Gold spoke exhaustively on the topic of corporate governance, listing numerous suggestions on how the Sarbanes-Oxley Act of 2002 -- which sought to reform the accounting industry in the wake of Enron scandals and institute penalties for chief executives guilty of securities fraud -- could be improved.
The Sarbanes-Oxley Act "was a crisis management tool used by the Congress," according to Gold, who noted that the corporate reform bill did not ensure that directors were sufficiently qualified for their positions.
"I'll tell you that most of the directors couldn't pass a final exam in Accounting 101," Gold said, explaining that many directors lacked accounting and financial expertise. He added that directors often spent insufficient time on company matters and were unfamiliar with their industries.
He then outlined various measures that could improve this situation.
"First of all, the most important thing, I think, is something called 'sunshine,'" Gold said. "Let people see and have transparency. Let them understand the process. You'll be able to make better decisions about how a company ... operates if you can get some sunshine."
Gold's other suggestions included proficiency tests, continuing education requirements, an evaluation process, public directors -- who "are people in the community who have some understanding of fiduciary relationships and who have a fair amount of skill," according to Gold -- and regular meetings with large shareholders and middle management without the presence of upper management.
Gold partly attributed the exodus of creative people from Disney to Eisner's loss of the "magic touch." Gold cited an example wherein Eisner initially thought that Finding Nemo -- which just won an Academy Award for Best Animated Feature Film -- was going to be a failure.
"Michael was hired because he was a very creative" person, Gold said. "He had a sense of what was on or off with young people, [but he got older and] wanted to be Wall Street suit-and-tie ... . The fire in his belly [began] to wane."
It was precisely this energy, however, that Disney needed.
"The entertainment industry is a young man/young woman's game," Gold said. "There's a time and a place for everyone."
