Bert Spector, an associate professor at Northeastern University, has an interesting comparison of the obligations of leadership in a public and a private company. The SEC imposes an obligation of transparency on public corporations that does not apply to private businesses. Thus, public companies must make full and public disclosures of their financial positions. Annual 10-K reports, quarterly 10-Q’s and occasional special 8-K’s require disclosure of operating expenses, significant partnerships, liabilities, strategies, risks and plans. These documents must be audited by an independent firm overseen by the Public Company Accounting Oversight Board. Furthermore, the CEO, along with the chief financial officer, is criminally liable for falsification or manipulation of the company’s reports. Private companies do not have such obligations. The CEO of a private business is not accountable to anyone. He can run the business as he wishes.
As we all know, some companies, whether private or public, are run very well; some are not. But, shouldn't we as citizens be informed as to our government's conduct and that of our employees?
Would you rather have Rex Tillerson, former CEO of Exxon Mobil, or Donald Trump - former owner, chairman and president of the Trump Organization, a family-owned limited liability company (LLC) that has owned and run hundreds of businesses involving real estate, hotels, golf courses, private jet rentals, beauty pageants and even bottled water -run the government?