Drexel University Adopts the Sarbanes-Oxley Act
February 26 , 2003

PHILADELPHIA (February 26, 2003)- Drexel University, a not for-profit organization, today became the nation's first major university to adopt the best practices of the Sarbanes-Oxley Act of 2002 that have been legislated to govern for-profit organizations, according to Senator Paul Sarbanes (D-Md.) . "I know of no other university in the country that has been as responsive as Drexel," said Sarbanes.

At its regularly scheduled quarterly meeting on Feb. 26 (today), the Drexel Board of Trustees voted unanimously to amend University bylaws to include the principles of the Sarbanes-Oxley Act. The amendments will ensure that no trustee receives compensation "directly or indirectly for service provided to the University" while serving on the Board's Audit Committee.

Under the amended bylaws the full board will appoint the members of the Borad's Audit Committee and its chair, who will now have explicit power to suspend any trustee found unfit to serve. The Drexel Board will also reserve the right to permanently remove the trustee.

"We are not a public corporation, but we do the public's business," said Drexel Board Chairman C.R. "Chuck" Pennoni . "We have always aspired to conduct the affairs of this University at the highest levels of ethics, integrity and accountability. The actions we have taken today are a formal commitment to ensure that the best practices used by business will be applied by this University."

For more than a decade, Drexel's Audit Committee, a standing committee of the Board of Trustees, has maintained its own written charter. The existing charter required that the committee comprise members who are experts in accounting. Audit Committee Chairman Randolph Waterfield, for example, is a retired partner of Ernst and Young, LLP. He is a certified public accountant who has served on the boards of the High Bar Harbor Taxpayers Association, the Lumina Foundation for Education and the Student Loan Marketing Association.

Effective today, that charter was amended to confirm the independence of the Audit Committee's members; the committee's responsibility for addressing complaints regarding accounting, internal control or auditing or other "whistleblower" reports; and the committee's power to investigate, including its right to retain outside advisors, legal counsel and experts as it deems appropriate.

" Drexel University prides itself on teaching its students the best practices that are being used in the professions and businesses that they will soon be joining," said Drexel President Constantine Papadakis . "Today, our board has made a public commitment on the way business will be conducted at our University. Those who contribute to Drexel's success - our donors, cooperative education partners, faculty and staff - can rest assured of our commitment to quality."

The actions of the Drexel Board followed management reforms implemented by Papadakis last fall, shortly after the Sarbanes-Oxley Act became law. At that time, Papadakis instructed Drexel's treasurer and chief financial officer to begin providing formal certifications that include all of the representations the Act requires from all senior financial officers in public companies, and to require all unit heads to provide similar certifications when they provide monthly financial statements to the CFO or any financial information to the University's outside auditors.

At Papadakis' direction, the University will also adopt a formal Code of Conduct. The code, developed by the finance department and the Office of Institutional Advancement in collaboration with a committee of faculty, administrators and staff, will be implemented this spring.

As a response to the shift in responsibility at the corporate level, Drexel's LeBow College of Business recently created the Christopher and Mary Stratakis Chair in Corporate Governance and Accountability. The University is one of few business schools in the country that have endowed a professorship in corporate governance. The endowed chairholder will not only provide assistance to the LeBow College of Business but will serve as a resource to Delaware Valley businesses in implementing governance concepts.

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