RESPONSIBILITY: Company chief executives should be held responsible for misleading company financial statements, President George W Bush argued yesterday in setting out a 10-point post-Enron programme for enhancing corporate reporting ethics.

"A good business always respects the boundaries of right and wrong," he told a National Quality Awards conference. He urge a return to "basic capitalism" in which investors were provided with a real understanding of true risk.

The proposals, set out as a call to the Securities and Exchange Commission (SEC) to beef up its supervisory role, would force chief executives and senior executives to return bonuses paid out on the basis of seriously misleading information and would allow the SEC to debar executives from service as directors in publicly quoted companies. Enron executives got bonuses totalling some $320 million (€365 million) last year as rewards for hitting stock-price targets.

Chief executives would be given a new responsibility to shareholders and required to sign off annually on the "veracity and fairness" of financial declarations. Directors would be forced to tell the public "promptly" when they sold or bought company stock for "personal gain".

Currently, the lag time can be 40 days for open-market transactions and more than a year for personal transactions with their companies.

Mr Bush also urged the accounting profession to set clearer standards and to establish an independent policing body, although others would prefer a role for the federal authorities in this respect.

And he called for a ban on practices that would give rise to conflicts of interest, such as accountants providing both internal and external audits to companies.

"Reform should improve investor confidence and help our economy grow," the US President said.

"It is important to provide regulation and remedies where needed, without inviting a rush of new lawsuits that exploit problems instead of solving them."

Meanwhile, the former Enron executive who is the administration's secretary for the US army, Mr Thomas White, has been accused by two senators of breaking ethics rules by failing to divest himself of Enron shares before he took office.