The Sarbox Blues
Regarding your CEO Summit analysis on Sarbanes-Oxley (January/February 2005): We have determined that public companies worried that the 109th Congress will revisit and toughen the Sarbanes-Oxley Act are in for some good news and some bad news. The good news is Congress apparently is not going to reopen Sarbanes-Oxley in order to toughen it up. But the bad news is that it won't be weakened either, so public companies won't be seeing any relief from the law's rigorous demands this year.
At our request, Sen. Johnny Isakson (R-Ga.) conferred with the law's co-author, Rep. Michael G. Oxley (R-Ohio), and reports: "There is not an interest nor an appetite for reopening Sarbanes-Oxley, and that's probably good for business, because any time something like that gets reopened, you never know what the end result might be." Oxley says he has informed regulators that it is their job to address the concerns coming from business, and where there needs to be tweaking, it should be done through regulatory agencies.
So it appears small and midsize public companies will continue to struggle with compliance demands, and also will continue to question the feasibility of being public. As your CEO Summit participants observed, Sarbox certainly has altered the risk tolerance climate and has made being public costly for management and investors.
Joe D. Goodwin
The Goodwin Group
In your recent editorial ("It's Time To Revise Sarbanes-Oxley," Final Word, January/February 2005), you state that "Sarbox is discouraging [CEOs] from taking risks and therefore making money."
In my experience as an internal auditor, taking risks is not necessarily tied to making money. A little restraint, even if imposed by Sarbox might be a positive outcome, given the Wild West attitude exhibited by some CEOs. There are ways to increase revenues and profits that don't require the lottery mentality. …