Sarbanes-Oxley has let fresh air into boardrooms

It almost seems poetic justice that in the lead-up to the third anniversary of the US Sarbanes-Oxley Act, the individual responsible in a large way for its passage – Bernie Ebbers, former chairman of WorldCom – should be sentenced to 25 years in prison for orchestrating a fraud that not only toppled the telecommunications company he founded but triggered shareholder losses of $180bn (since the share price’s peak in 1999).

Designed to repair damaged investor confidence following an outbreak of corporate boardroom scandals, Sarbanes-Oxley set important new baselines for financial reporting and disclosure by companies. It also imposed tight new regulations on auditors and virtually single-handedly changed the face of corporate governance.

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