The Long Arm of Sarbanes-Oxley and Other Recent Corporate Governance Reforms

Abstract

With the media frenzy over the past few years surrounding the enactment of the Sarbanes-Oxley Act of 2002 and other similar corporate governance reforms, many people have become numb to the effect of such reforms—especially executives of privately held companies. However, despite the original public company application of many of these reforms, people are beginning to realize that their shadow is extending much further and having dramatic effects on the way private companies conduct business. The restrictions of these reforms are affecting everything from the sources and processes of finding capital to the relationships companies have with their insurers, lenders, and customers. As a result, private companies need to react now to become familiar with the provisions of these reforms and become aware of what steps can be taken to lessen their impact—or risk being blindsided at a later date.