In the 12 months since it was signed by President Bush, the landmark Sarbanes-Oxley Act has caused U.S. companies to spend heavily on compliance, altered the culture of boardrooms and boosted the business of firms that offer ethics and compliance consulting. Improved behavior on the part of companies as a result of Sarbanes-Oxley is impossible to quantify. But to whatever extent misbehavior has eased, the impetus behind it has not been the provisions of Sarbanes-Oxley. Rather, it has been the disclosure of wrongdoing at firms like Enron and WorldCom and the ensuing public outrage, according to Wharton faculty members.
Wharton experts say some provisions of the bill and related actions will likely improve corporate behavior. Some, though, are little more than public-relations window-dressing. In addition, others may prove risky for companies seeking to balance strategic control of a company’s direction with accountability to shareholders.
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