The Supreme Court Spares Sarbanes-Oxley

Having run a small company, I know how important it is to completely understand all of the metrics of your business: payables, receivables, profit, debt, sales, etc, etc. It kills me that there are a fair number of business people out there who have a problem with the requirements of Sarbanes-Oxley. To me, if you really know and understand your business and have the proper systems in place, compliance should not be that big of deal.

Those against seem to have these attributes: none have ever really run their own business, most work for large companies and none are willing to actually commit to the accuracy of whatever system they employee to describe their business.

Perhaps this is function of how we educate the people chosen to run businesses? The typical MBA course seems to focus on what went wrong and how to weasel out of it. And there does seem to be a high degree of self-selection amongst these people as they seek those most like themselves when recruiting. It seems that our business leaders want the dough but not the responsibility or risk.

The number one knock on Sarbanes-Oxley is the cost of compliance. I laugh when I read this because I reckon that if some hot-shot CEO has to affix his or her own name to the accounts for their company, then their training and culture of avoiding responsibility and risk compels them to spend whatever dough it takes to make damn sure that what they're signing is the truth (or some version of it). Of course, you'd think that this is something they should be doing anyhow on behalf of their shareholders.

Perhaps the critics should think about Sarbanes-Oxley and corporate governance differently. I propose that a business should incorporate the requirements of Sarbanes-Oxley and good governance into a quality program that constantly measures the performance of a business, identifies areas where incremental changes can be made to improve performance, identify and expand the relationship with investors, customers, employees and suppliers. Many firms already spend money on accounting, CRM, ISO 9000/Six Sigma, ERP, tax avoidance (er, compliance), etc. If a company has to spend more to comply with Sarbanes-Oxley, then perhaps they need to take a good look at their other processes that feed such compliance?