Monday, September 21, 2009

Sarbanes-Oxley Meets Education

Teaching is a second career for me. I spent fifteen years on Wall Street as an analyst. My passion was researching technology companies to understand them better than anyone else. Towards the end of my tenure, the Internet Bubble compromised business practices. The investment banking divisions of brokerage companies pushed to underwrite Initial Public Offerings (IPOs) of marginal companies. The analyst's role was supposed to be a major component of the due diligence. Analysts often rubber-stamped deals in the quest of large year-end bonuses. At the same time, accounting firms were also benefiting from the birth of new companies in the form of an increasing market for fees. Sarbanes-Oxley (SOX) legislation gave teeth to laws that were already in place. Senior management and the board of directors always had a fiduciary responsibility to shareholders. SOX made them personally liable for inaccurate financial statements.

Radical Idea
Why am I talking about financial services? The response to such a widespread lapse in judgment was not lots of tests and metrics (like high stakes tests). It was holding the management more responsible for the job they are doing. Here is my radical idea. Principals should certify that they have quality teachers? My definition of quality teachers is not test scores. Test scores are like financial statements (particularly earning per share) in the Pre-SOX days - they can be manipulated. There is also debate as to the validity of test scores over short time frames (e.g., year-to-year). I don't think we need to rely on data, although perhaps there is a place for it as supportive evidence. My idea is to have principals certify that their teachers are good teachers. I believe that a veteran principal or teacher knows good teaching when they see it. They don't need reams of data. They need to observe teachers frequently and carefully enough to be confident that they have a quality staff.

Looking forward to comments!

Sources:
Image from http://jyotiraj.wordpress.com/2007/10/14/s-ox-sarbanes-oxley-act/