A recent blurb in the Money section of Tuesday’s (May 9th) USA Today confirms what we all knew what was going on when the law was passed in 2002: Sarbanes-Oxley compliance is costly.
Sarbanes-Oxley presents both problems and opportunities for those who approach compliance with the appropriate end goal in mind – to increase shareholder value. The challenge is finding the time, expertise, and resources to comply.
Sarbanes-Oxley legislation has not dampened reward and recognition activity. It has however broadened the dimension of data and analysis. While reward and recognition activity is likely to become a material reporting function, it has resulted in cautious financial executives getting involved early in the planning process and challenging financial justification before funds are allocated.
Financial executives are demanding air-tight business cases and are hesitant to approve budgets unless there is a clear and demonstrable business need. They are also demanding detailed tracking of all program activities. Depending on the corporate environment, Sarbanes-Oxley has elevated launch barriers and added new layers of ongoing scrutiny. Progressive companies have modified their reporting structure to reflect this and in some cases are using digital dashboards to afford faster data views that allow planners to constantly examine a program’s relevancy and business purpose.
