1. LEARN FROM EXPERIENCE

The first year of Sarbanes-Oxley was a trial, so learn from all the confusion it caused and make the experience less painful next time. Do you really need that many key controls? Are there efficiencies for future compliance? Explore all the possibilities.

2. WATCH YOUR FLANKS

For those companies that have managed to avoid the dreaded legislation, watch out. Elements of Sarbox are starting to creep in elsewhere, so keep an eye on regulatory changes in those countries in which your company has a foothold. You could find yourself subject to many of the same demands if you have links to Japan or France, to name but two countries.

3. CHOOSE SARBOX VOLUNTARILY

Some private companies have started to adopt large chunks of the very legislation that many have struggled with in the past. There are reasons for doing so; for example, if you are undertaking a systems refresh and looking for ways to improve controls.

More crucially, perhaps you should think about being able to comply with Sarbox if your company is a likely takeover target of a US company. It could just be a deal-breaker.

4. TALK TO INVESTORS

Investors are looking for more insight into the running of the company than previously, and the FD is in a position to provide that information.

As a rule of thumb, FDs should spend about 20% of their time talking to analysts and investors, fielding questions on cost control, potential weaknesses and growth areas.

5. GET INTHE RIGHT NUMBER TWO

With more and more of the finance chief ’s time being taken up by investors and working with the board, today’s number two in the finance department will be doing the role that the FD would have been carrying out 15 years ago. That means a lot of responsibility, so only high-quality candidates should be sought.

6. CONSIDER OUTSOURCING

If Sarbox compliance is still taking up too much of your company’s time and resources, despite the potential efficiencies in year two, why not let someone else look after compliance? There are companies that work to take away as much of the Sarbox burden as possible through shared service centres. This can reduce costs dramatically and free up resources.

7. SORT OUT YOUR IT SYSTEMS

Technology was supposed to bring massive benefits in terms of increased efficiency within the corporate structure, but if an implementation is not risk-managed properly, such as in many notorious public-sector projects, it can become an enormously costly albatross around the organisation’s neck.

Control any systems upgrade projects to avoid this potential disaster, putting in as many checks and balances as you can, without causing delays.

8. KEEP YOUR EYE ON PROJECTS

With an increased focus on governance issues, board directors and FDs have been getting more involved in various business projects. However, that interest tends to wane as the project progresses, resulting in insufficient emphasis on ensuring that the forecast benefits of the project are delivered.

Avoid this situation by following the project’s progress closely.

9. GET ETHICAL

Managing a company’s risk and corporate ethics have been intrinsically linked since the collapse of Enron and Worldcom. Stakeholders are far more tuned in to the risks facing businesses, and expect companies to manage these risks in an ethical way. Ensure your enterprise risk management strategy takes this into account. It may even create value for the business.

10. BUY INTO PROCUREMENT

FDs have traditionally had little regard for procurement issues, but they can provide an opportunity to unlock tangible value in an organisation. It is not unusual to identify opportunities to reduce bought-in costs by up to 40%.Those who have gone through the Sarbox process have an advantage as section 404 requires complete standardisation and full documentation of procurement, so take advantage of this.

www.kpmg.co.uk