business news in context, analysis with attitude

The Washington Post reports that some business-sponsored trade associations are looking to Congress to make amendments to the Sarbanes-Oxley Act, which required corporate CEOs to guarantee the accuracy of corporate financial statements and required companies to certify that controls were in place to prevent fraud.

Sarbanes-Oxley was passed in large part because of the financial scandals that roiled companies such as Enron and WorldCom, losing investors millions of dollars in the process.

The move to amend the legislation, according to the Post, is aimed specifically at elements of the law that require fund companies to appoint non-executive members of the board of directors, and requiring companies to treat stock options as an expense.

The US Securities and Exchange Commission (SEC) reportedly is concerned about efforts to water down the rules, while the US Chamber of Commerce says that the moves are designed only to adjust parts of the law that have proved unworkable in their implementation.
KC's View:
While we’re sure that there always can be adjustments to make the legislation more “workable,” business leaders need to remember that the image of major companies in this country suffered a series of black eyes over the past few years. Sarbanes-Oxley didn’t appear out of the ether – it happened because companies violated the law and the ignored the interests of their investors while feathering the nests of their executives.

Shame on any company that lets this happen again.