With the conviction and incarceration of America's most prominent CEO, Martha Stewart, it becomes incumbent on corporations of any size to make new governance arrangements. If you manage other people's money, beware! At issue are the corporate governance rules created by the Sarbanes-Oxley law (hereafter, Sarbox) and new applications by a fresh crop of U.S. attorneys. Both criminal and civil penalties await that will make the RICO abuses of the last 30 years seem like a waltz to corporate officers and directors.

In my opinion, formed after 30 years of practicing corporate and alternate dispute resolution law in Texas (home of Enron, Haliburton, et. al.), the only practical and economical solution is for corporations to create ombudsman positions. These officers could help inform managers and executives of possible abuses down the ranks, while there is still time to correct them internally. The concept, which originated in Sweden, has found growing acceptance in the United States in recent years. At least 200 major corporations have such positions, with 50 added in the two years since Sarbox passed.

Major corporations with such positions include Shell Oil, Sony, Bank of America, General Electric, Dell Computer, The New York Times, and American Express. Columbia and Harvard lead the list of universities with ombudsman offices, which also includes all the University of California campuses, Stanford, MIT, Princeton, and the alma maters of our last two presidents, Yale and Georgetown. Even the FBI, FDIC, Secret Service, and the Department of Justice, itself, have ombudsmen.