Directors call for Sarbanes-Oxley repeal
A survey shows US directors want radical changes to Sarbanes-Oxley regulations
More than half (58%) of directors in the US feel Sarbanes-Oxley regulations
should be repealed or overhauled, according to the latest study from Korn/Ferry
International.
Sarbanes-Oxley regulations were introduced four years ago to improve
governance, but a staggering 72% of responding directors in the Americas believe
that the regulations have made them too cautious; not taking the necessary risks
to drive growth. This view is shared in the UK where 61% of directors view the
Combined Code as too restrictive.
But, unlike the US, only 28% of UK directors believe that a complete overhaul
or repeal of the Combined Code will remedy the situation.
‘Although gross corporate misconduct has necessitated recent landmark
regulations, there is a growing contention that the impact of these rules has
been negative,’ says Charles King, head of Korn/Ferry International’s global
board services practice.
The Board of Directors Study examines opinions and practices found in
boardrooms of major corporations throughout the world. The findings are based on
the responses of nearly 1,200 board members from 15 nations in the Americas,
Asia Pacific and Europe.
The study shows that directors worldwide are more discriminating when
accepting directorship invitations due to perceived risks. 59% of directors
surveyed in the Americas have declined a board position due to the risk
associated. Risk was also characterised as the determining factor in turning
down board seats by 83% of surveyed directors in Australasia, 77% in Switzerland
and 68% in non-Japan Asia.
