David Lentz

Heed Jim Clark's SarbOx Warning

So Sarbanes-Oxley is tough on small businesses. No news there. Do you have suggestions (other that throwing it completely out and returning to the no-rules-obeyed times of yore) that could lighten it's load on small businesses, and yet still hold larger firms' feet to the fire of accountability and truth?

While SarbOx has undeniably been a heavy burden to bear for small businesses, I can see that it has had an impact on the community of robber-baron CEOs loose in corporate America at large, people like Ken Lay, Bernie Ebbers, Dennis Kozlowski, Jeff Skilling, ... People who are intent upon using the resources of large corporations to line their pockets at the expense of the stockholders. I've seen corporate heads who formerly thought nothing of indulging in round-the-world parties on the company's dime get tossed out, and others rein in their conspicuous behavior.

So what's your answer? I'm sure that the requirements could be streamlined (it was, after all, a solution devised by Congress), and I'd think that revising the tax code to allow accountants who are employed solely to deal with SarbOx to be deductible expenses to a company would go a long way toward lifting the burden from the shoulders of start-ups and small companies. Throw in some sort of "shield legislation" to protect corporate officers from the flood of shareholder lawsuits that always descends any time the company stock takes a dip -- a shield that would be removed once the company was found to be not in compliance with SarbOx -- and I think things might be improved.

But throwing out SarbOx (which the tone of your piece seemed to indicate was your solution, sorry if I read you wrong), and returning to the bad old days is not the answer.

We still have way too many CEOs (e.g., Whitacre at T, Tillerson at XOM) who are using the corporate resources not in order to compete, but instead opting to buy out or lobby/legislate out the competition, enormously growing their compensation while doing a miserable job of running the business. The gutting of anti-trust by the current administration is responsible for this sad state of affairs. I don't favor extending SarbOx to deal with this, just putting teeth back in the DoJ.

But to return to the original point, so you don't like SarbOx -- what's your better plan?