NEW YORK -- Former U.S. Federal Reserve chairman Paul Volcker offered a plan Friday for Arthur Andersen LLP's survival that includes replacing top management and installing an independent board that he would head.

He said the plan would succeed only if the federal indictment of the firm were dismissed and if a cap is placed on the firm's financial liability from the Enron Corp. scandal.

"All that has to come together to make this initiative viable and successful," Volcker said at a hastily arranged news conference.

The changes outlined by Volcker go much further than recommendations made by his committee earlier this month, which included a proposal to split Andersen's auditing from its consulting services.

While the latest proposal is reasonable and could save the company from imploding, it should be seen as a "Hail Mary defense," said Itzhak Sharav, an accounting professor at Columbia University's business school.

"The problem he will have is convincing the Justice Department" to dismiss the indictment, he said. "They look at it as prosecutors who feel the company did not live up to obligations and should be punished."

Volcker, who heads an oversight committee charged with making sweeping reforms at the firm, said he would chair the new Andersen governing board. Other members would include former U.S. Senator John Danforth; C. Michael Cook, the former chief executive of Andersen competitor Deloitte & Touche; and former U.S. Comptroller General Charles Boucher.

The new board would fire top managers, he said. However, Volcker wouldn't comment on whether chief executive Joseph Berardino would be among those told to leave.

"There will no doubt be changes at the top," he said.