Compliance Week doesn’t run theatre reviews. But while we’re here, we suggest readers might want to take in a performance of “Enron, The Play,” now playing a star turn in London’s West End to overflow audiences.

We both recently attended, and were struck by how much this fictionalized British retelling of a 10-year-old American scandal illuminates today’s governance issues. Consider two current hot-button items: The new requirements for more extensive disclosure of director nominee qualifications and how to respond to the recent Supreme Court ruling allowing virtually unlimited direct corporate political spending.

The play opens with three blind mice wandering through a light-column maze. The mice, representing the company’s directors, reappear only once: to waive the company’s conflict-of-interest policy. That, in turn, allows the CFO to be on the opposite side of Enron in the creation of the infamous off-balance-sheet entities that ultimately drove the company into bankruptcy. The mice are virtually indistinguishable; there is no individual identity to any of them. Their only singular characteristic is a collective blindness to the moral and corporate abyss being created around them.

That is what the Securities and Exchange Commission’s new disclosures about director nominees are designed to prevent. By spotlighting the qualifications of directors, the SEC is providing a not-so-gentle nudge to boards, and particularly to nominating committees, to increase the robustness of the policies and procedures they use to determine the desired skill sets of the directors—and the quality of the candidates themselves.

But there is a second rationale, equally important but often ignored, pertaining to a company’s relationship with its shareowners and those shareowners’ view of the legitimacy of the corporate system. We have long maintained that the single most important governance protection investors have in the American system is the ability to elect qualified directors. That’s no brilliant observation on our part; the Delaware courts have often maintained the same contention. However, disclosure about those directors, until now, has largely been boilerplate biographies.

As we wrote in May 2008 in “How to Hire a Director,” and again in June 2009 in, “What’s Coming Round for Directors,” the lack of real disclosure contributes greatly to institutional investors’ sense of voicelessness and frustration. That, in turn, has spawned too many adversarial situations between directors and the investors they are supposed to represent. Investors had no way to know why a particular director was nominated; what his or her contributions were to the company; why his or her particular skill set was valuable. How were we to make an intelligent decision, then, to vote for one director or another? Even if the directors weren’t blind, we were voting blind. The hope is that the new director qualification disclosure will both improve the process by which directors are selected and help shareholders to make individual decisions about people who, until now, have been largely indistinguishable individuals on a collective board.

So what should companies put in their director nominee disclosures to fulfill the regulations and satisfy investors? The SEC requirements are straightforward:

(1) Whether and how the board considered diversity in proposing its slate;

(2) A list of all directorships held in the last five years (rather than the old requirement for current directorships only); and

(3) An individualized description of the experiences, qualifications, skills, or other attributes that led the board to propose that individual nominee or director (in classified boards, such disclosure is also required for continuing directors).

From the shareowner viewpoint, the last is critical. We want to understand what a particular director brings to that specific board. A bland recitation of a generic resume will not fit. Don’t just say, “finance skills”—explain if it is capital markets expertise, or actuarial qualifications, or audit skills that the board sought, and why that is critical to the company at this time. In other words, help us understand that the nominees are both individually talented and suited for the particular corporate challenges they will face. That, of course, implies that the qualifications should be presented in the context of the strategy, risks, and environment facing the company.

And what about the Supreme Court ruling, Citizens United v. Federal Election Commission, that has now moved to center stage? Midway through the play there’s a scene wherein Enron’s CEO and president effectively bet the company on the election of George W. Bush in the presidential election of 2000. The temporary advantage that Enron receives, along with the benefits it thinks it’s getting from exploiting California’s newly deregulated electricity market, comes back to help drive the company into bankruptcy and doom President Jeffrey Skilling and CFO Andrew Fastow to jail.

The hope is that the new director qualification disclosure will both improve the process by which directors are selected and help shareholders to make individual decisions.

The lesson is clear: Short-term benefits gained through gaming the political system usually end badly. And that’s the fear investors have when they consider the Citizens United ruling allowing unlimited corporate spending on direct political speech.

Our inboxes were already overflowing within 24 hours of the ruling. Shareowners were peppering us with commentaries, requests for conference calls, and suggested reactions. The universal theme among all of them: a desire to control such spending. Virtually nobody thinks it’s a good idea, no matter what the law allows. Already, ad hoc investor groups are considering petitions to the SEC for action under existing authority, letters to congress, and engagement campaigns on a company-by-company basis, all with the goal of reining in political spending that has not yet begun.

Interestingly, the corporate officials we’ve spoken with are basically aligned with the institutional investors. They don’t want to be every politician’s automated teller machine. And they don’t want to be put in the position where they have to choose between partisan causes, inevitably annoying one side or another over time.

For a solution, we spoke to one of the architects of the British regulation governing corporate political contributions. Basically, Britain requires shareowner approval for any political expenditure of corporate assets above a de minimus amount. The de minimus qualification allows attendance at local dinners and such, but the requirement for a shareowner vote prior to large expenditures places a large hurdle in the path of paying for a television campaign for or against a particular candidate or party. Investors find it workable, and corporate officials find it a blessing. And while attempts to circumvent the regulations inevitably arise, the rules themselves are well understood, non-controversial, and actually liked.

We expect shareowner groups on this side of the Atlantic to start proposing such policies on a company-by-company basis. Indeed, we would not be surprised to see boards of directors adopt such rules voluntarily, even before shareowners ask. While companies don’t normally like to restrict their degrees of freedom to act, self-regulation in this case could prevent any number of uncomfortable telephone calls from legislatures to corner offices.

If you want to see “Enron, The Play,” but are not planning to visit London anytime soon, be patient. It’s coming to Broadway. When it does, make a reservation. It’s easier to understand than SEC regulations, more dramatic than the 5-4 Supreme Court ruling in Citizens United, and probably teaches more about governance than most textbooks. And, not so trivially, it’s also a great evening of theatre.

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