Today, Harold M. Williams, whose career pursuits have included the law, academia, business and government, marks his first anniversary as chairman of the Securities and Exchange Commission, a job he describes as "the most consuming activity I've ever undertaken."
"I said when I came here that this is the most important time in the history of the commission to be chairman," Williams said during a recent interview. "I still believe that."
During the lengthty session in his office at SEC headquarters here, the 50-year-old chairman spoke animatedly about his job, showing the confidence gained from a year's experience. A sling supported his right arm and shoulder, which was dislocated in a fall at the Summer Palace outside Peking during a visit last month.
Among the subjects discussed by Williams: boards of directors, accuntants, the national market system, corporate earnings, and the effectiveness of SEC suits against business crime.
Williams triggered a controversy earlier this year when he suggested in a speech that his ideal corporate board of directors would be free of control by insiders.
He was attacked by the National Association of Corporate Directors and the Business Roundtable. Forbes Magazine said:
"That a man who spent a considerable part of his life in business . . . could deliver such an address is astonishing. That he is in position to perhaps give life to some of his notions is disturbing."
And yesterday, at Time Inc.'s annual meeting, Chairman Andrew Heiskell was asked whether he had considered Williams' suggestions about putting outside directors on its board. Heiskell said no. "In fact, I disagree enterprise system threatened by the current approach to what he calls "corporate governance."
"That's going to bring the whole damn system down," he said. "The concern I have is that we are moving slowly, but at this point inexorably toward direct federal involvement in corporate governance."
To Williams, it is largely the ineffectiveness of most boards that is bringing on the threat of federal intervention. "It comes down to whether the boards function in a way to hold management accountable," he said.
Boards are dominated by employes of the corporation or suppliers of services, whether they be legal, banking or products, he said. "They are all beholden to the chief executive officer for their jobs or their contracts."
"Clearly the chief executive should be on the board," he said. "But why should these other people be on there?"
"His ideal board would include the GEO and perhaps his understudy. But the chief executive should not be chairman because "he really is the officer who should be accountable to the board." The balance of the Williams' board, including the chairman, whould be totally independent of the management.
Much of Williams' time is taken up trying to set up the national stock market sustem, which was mandated by the 1975 Securities Exchange Act amendments.
"This is an industry that's got lots of problems," he said. "It's not going to be easy to get it all together. But I would hope in the next several years to have the basic pieces (of the national market system) functioning."
Williams was asked about the recent criticism in the press and among lawyers about the effectiveness of the so-called consent decree, which is the major legal weapon of the sec's enforcement division.
For example, when the SEC sues a corporation and its executives, charing fraud or some other civil violation, the defendants normally settle the suit by signing a consent decree, "neither admitting nor denying" the allegations by teh SEC.
Williams, however, believes the threat of contempt of court charges for violating the consent decree is an effective deterrent.