SEC Commissioner Hears Complaints That Compliance is Stifling Business
In a recent speech, SEC Commission Cynthia Glassman said that she’s repeatedly heard that compliance with Section 404 of Sarbanes-Oxley, which requires public companies to adopt a system of internal controls, is stifling business innovation. The complaints will sound familiar to many advisers grappling with regulatory demands.
Among other things, Glassman said that she’s hearing that SOX compliance is forcing companies "to put business initiatives on hold and focus excessively on the details," said Glassman. "Basically," she said, the criticism is that compliance "has taken management’s attention away from running the business of the company to obsessing over completion of an internal controls checklist where each ‘i’ is dotted and ‘t’ is crossed, all of which is substantiated with reams of documentation."
"I’ve heard these messages loud and clear." said Glassman. "And I can assure you that others at the Commission . . . have as well."