| If your concern is going public then you have successfully grown a business to a gigantic and reasonably stable level and have beat all the odds. You have therefore picked the correct country. While Sarbanes-Oxely does pose a financial burden on companies which is still too high (typically $1M to $3M/year), it does provide a level of protection for employees of those companies, bond holders and mutual funds which hold most of America's retirement money. Paperwork and hoops for going public are handled by accountants and attorneys. Sarbanes effectively removed corporate governance issues which cause huge problems (like having a captured board or having the audit firm also being paid for consulting etc. The citations you cited are written by The National Venture Capital Association who lobbies against Sarbanes because it affects their returns. In fact, 69% of NCVA dues go to lobbying. "We estimate that 69% of your dues will be used for lobbying and is not deductible because of recent changes in federal tax law." http://www.nvca.org/index.php?option=com_content&view=ar... The second article you cite has the following quote:
"Despite the many chilling headlines and reported cases where companies have cited SOX as the reason to shelve plans for an IPO, the evidence to date that SOX is sufficient cause for companies to stay private has been largely anecdotal or limited in scale." ---
All that said, SOX is too expensive and the D&O insurance should be reduced to increase public company valuations and IPO valuations. It does represent an unintended burden on shareholders, CEOs, Bond Holders etc. but SOX is overall positive in the sense that it minimizes fraud and reduces risk for all stakeholders including non management employees. |