A Modest SOX Proposal: Require Compliance Certification Before Something Goes Wrong, Not After

Corporate Compliance Insights – Maria D’Avanzo, Chief Evangelist Officer at Traliant, makes the case that the government should do more to motivate companies to support Chief Compliance Officers so they can help prevent misconduct before it happens.

Here’s an excerpt:

The Sarbanes Oxley Act (SOX) was enacted 20 years ago in response to a series of dishonorable and disabling accounting controversies involving companies like Enron and WorldCom. While SOX does contain some specific compliance-related provisions, such as a mandatory code of ethics for senior financial officers and whistleblower protections, its main themes are the prompt and accurate disclosure of a company’s financial condition and the prompt and complete disclosure of material changes to financial status and operations. 

The effectiveness of compliance programs is not included among the other SOX requirements, and perhaps it should be. If my colleagues are right that companies won’t focus on compliance unless forced to do so, SOX should be amended to address compliance programs specifically. A handful of key provisions could be added to SOX to help CCOs overcome the challenges acknowledged by Assistant Attorney General Kenneth Polite Jr., head of the DOJ’s Criminal Division, and increase the likelihood that a corporation’s compliance program is effective before a compliance failure occurs. 

Read the full article in Corporate Compliance Insights