Five years after passage of the Sarbanes- Oxley Act of 2002, corporate directors are newly empowered with an educated understanding of their roles, and a healthier balance between the CEO and the board of directors is the result. Public scandals and the fear of personal liability may be the cause, but today's corporate directors are unwilling to serve as the CEO's rubber stamp. Just look at the resurgent independent directors at Disney, once far from an example of good governance. The company welcomed a new CEO and published clear governance guidelines. After years of turmoil, this year's annual meeting saw all 11 Disney director nominees, six of whom joined the board since 2004, overwhelmingly elected. You can bet Starbucks ex-CEO Orin Smith (a past Washington CEO Magazine "CEO of the Year"), who joined the Disney board in 2006, will provide the type of independent integrity many observers found lacking there in the past.

With more than 600 directors serving on the boards of the 175-plus public companies that have announced option backdating investigations, surely it's not the rare director at outliers like Enron and WorldCom who needs to be concerned. A bright light is shining in every corporate corner, revealing an eyeopening level of dirt. Every director at every company should be paying attention, and, fortunately, they are. Director education programs are overflowing coast to coast, and the National Association of Corporate Directors (NACD) membership has grown nearly fivefold this decade, to about 10,000 members.

For decades the corporate focus has been on the CEO. Yet, the laws in all 50 states evolved with a fundamental precept that the corporation's board of directors, not the CEO, is ultimately responsible for the corporation's actions. The board serves in a fiduciary capacity to protect shareholders' interests and to act on behalf of the corporation. The directors, acting as a board, hire management and, on management's recommendations, make major decisions. Management reports to the board, not the other way around. The board, not management, nominates new board members. The simple truth is that Sarbanes- Oxley and recent public scrutiny have had a positive effect.

U.S. corporations can and will adapt and thrive in this environment. Because of the time commitments now involved in serving on a board, individuals are sitting as directors on fewer boards, and taking each position more seriously. Boards are also becoming more comfortable with the procedural requirements. Yes, a few of the new standards, like Sarbanes- Oxley's dreaded Section 404 internal control requirements, have gone too far and warrant modification, so we can reinvigorate our ailing IPO market. But in general, the changes were needed. Talented individuals in our country's increasingly diverse executive and professional ranks are filling open board positions and bringing a renewed energy and commitment to excellence. These new directors are also bringing a passion for doing the right thing.

Started less than two years ago, the NACD's Corporate Directors Institute, which confers the Certificate of Director Education, has seen attendance soar at its conferences. Thousands of directors now regularly attend continuing education programs, and there is an unprecedented sharing of ideas and best practices. Increasingly, investors are looking at the quality of a company's governance when choosing where to put their money. With the abundance of high-quality programs, no director has an excuse for not paying attention, and most directors gain a greater awareness and understanding of the job they are doing and how to do it.

Our Northwest region has seen few scandals, but we are not immune from the possibility of corruption - it takes clear thinking and a high ethical standard to avoid crossing the line, and with great sums at stake, it often takes a rare courage to make the right choices. Directors must be vigilant. While there are rule-bending actions today that may seem innocent or common, with the bright light of hindsight, those same actions may look very questionable tomorrow. Directors must ask, "What if someone were to shine a bright light tomorrow on what we just did today? Does it stand the test of time and independent scrutiny?" Some call it the "Cover of the Wall Street Journal" rule. In reality, it is the "common business sense" rule.