|The gaming industry's long history of tight regulation has helped transform what was once perceived as a shady enterprise into one of the most financially transparent sectors of the US economy. |
However, the casino industry can’t be complacent about avoiding the kinds of accounting scandals that have toppled corporate Goliaths such as Enron and WorldCom, a top Nevada regulator told a group of casino compliance officers Thursday.
'You've got to be aware of the potential conflicts of interest your boards of directors are going to face,' Nevada Control Board member Scott Scherer told a group of about 50 people at a regulatory compliance conference in Las Vegas.
'If you have a compliance committee, use it. If you don't have one, consider creating one,' Scherer said.
Scherer also called the federal government's recent corporate responsibility legislation 'unfortunate' in that companies could not be relied upon to police themselves. More regulation is not necessarily the answer to corporate America's troubles, he added.
Board members must not only be independent but must come prepared to meetings and 'ask the tough questions' of management, Sherer said.
Sherer criticized so-called 'celebrity' directors who don't understand corporate governance, directors who spread themselves too thin by serving on multiple boards, personal friends of the CEO and directors who also serve as consultants or suppliers to the company.
Staff attorneys, chief financial officers, controllers and internal auditors must ultimately report to the board and to shareholders, not just to top management, Scherer added.
With its dependence upon gambling revenues and emphasis on having companies self-report problems once they are licensed, Nevada regulators are considered friendlier to casino companies than regulators in some other states.
Maintaining the public's confidence and trust is vital to the industry's success because gambling remains controversial, Scherer said.
'The industry is still an easy mark,' he said.
The event was a third annual compliance meeting organized by the Gaming Education Conference, a for-profit group based in Minneapolis and headed by Bill Dorn, the former publisher of Casino Executive Magazine.