Proposals by President Bush and the New York Stock Exchange designed to root out and prevent corporate malfeasance are rising to the top of the agenda at Minnesota's largest corporations. Lawyers from some of those companies discussed scandal, reform and the future at a forum in Minneapolis Wednesday.

Lawyers agreed that reform is necessary, and that reform will bring change, but whether change will be subtle, or sweeping, was cause for debate.

Take, for example, a recent mandate from the Securities and Exchange Commission. On Aug. 14, the SEC will start requiring CEOs of the nation's 945 largest corporations to certify -- in writing and under oath -- that their financial statements are complete and accurate.

It's a rule meant to prevent another Enron, where the company's CEO said he was unaware of the aggressive and improper accounting that eventually led to the company's demise.

David Lubben, general counsel for Minneapolis-based United Health Group, says the SEC's mandate is ultimately toothless.

"I would like to meet the CEO or CFO who didn't feel personally responsible for what was in those disclosure documents when they put their name on those disclosure documents, stand in front of their boards and talk about performing and make promises to shareholders about what they think they're going to be able to do. In my experience those are not promises or statements lightly made. And that you're going to have to sign a piece of paper that says I really mean what I said, I'm not convinced that that's going to accomplish anything," Lubben said.

But Elizabeth Wittenberg, associate general counsel for Golden Valley-based General Mills, says the SEC's action will encourage reform.

"I think we will see more, for example, ethics and compliance issues being raised throughout organizations, where people are troubled by something and say, 'is this like Enron, is this like Merck?'" - Gary Nelson, vice president, general counsel at Minneapolis-based Ceridian

"What has changed here," she says, "is now we have a situation where you've got a CEO liable for false statements if he signs this thing, and pleading, 'well that was happening at lower levels, I didn't really know what was going on.' That's going to be pretty hollow now. People who were taking that tack are really not going to be able to take it anymore."

President Bush is calling for longer prison sentences for those convicted of corporate fraud. The New York Stock Exchange has also proposed that all companies it lists have mostly independent boards of directors.

And the SEC is requiring companies to file their annual and quarterly reports one third faster than they do now while also verfiying to a higher degree the accuracy of those reports.

I'm surprised that the SEC is asking us to do these things at the same time, because I think they're in direct conflict with each other," says General Mills' Wittenberg.

She agrees reform is necessary, but says the SEC's approach puts companies in a tough position. "I'm all in favor of more timely disclosure if that's possible]," she says. "But I do think we're going to inevitably sacrifice some level of analysis and careful thoughtful consideration of the numbers, I think it's almost inevitable. I don't know how you avoid it."

And Wittenberg says the SEC's requirements will also mean bigger workloads for legal departments.

"Quicker turnaround really will mean more people will need to be involved," Wittenberg says. "There's almost no avoiding it. And for people who staff law departments of companies, that's going to be very relevant. Where do you get the money for that?"

Ultimately though, lawyers at the forum said the biggest changes may have to do more with culture than with new rules.

Ceridian's Gary Nelson says the heightened attention to corporate misconduct will induce employees to speak up if they see something wrong.

"I think we will see more, for example, ethics and compliance issues being raised throughout organizations, where people are troubled by something and say, 'is this like Enron, is this like Merck?'" Nelson says.

General Mills' Wittenberg also predicts the public discussion surrounding corporate conduct will bring a change in business culture. "I think it will have a very beneficial effect," she says. "Not necessarily in the actual rules themselves, but in the fact that this is something people are going to be talking about, that your CEO's going to be asking about. And if he's not, you're going to want to prod him to focus on it."

But some lawyers wonder whether the changes in corporate behavior may only be short-lived. After all, the last spate of corporate scandals happened only in the 1980s, when investors like Ivan Boesky and Michael Milken went to jail for insider trading and fraud.

Ceridian's Gary Nelson says it didn't take long for American businesses to forget the lessons learned then.

"Jail terms didn't deter a lot of people for a very long time I guess," Nelson says. "It's hard to change the morals of a country."

Short of adhering to higher moral standards, lawyers say corporations around the country are scrambling to comply with the SEC's Aug. 14 deadline for verifying the company's books.

Some of the lawyers agreed that more companies may choose to air any as yet undiscovered misdeeds prior to that date.

The Securities and Exchange Commission