When I saw a Reuters UK headline blaring "NYSE Euronext CEO urges Sarbanes-Oxley rethinking," I must admit I rolled my eyes. Here we go again, I thought. I've read these arguments so many times I could probably recite them in my sleep:
Sarbanes-Oxley compliance costs too much for small and mid-sized businesses. Listing requirements for foreign companies are too complex and cost too much. Sarbanes-Oxley is pushing companies to go private, or pushing companies to markets in other countries. Sarbanes-Oxley stifles innovation and other business goals because companies spend too much time checking boxes.... The list could go on ad nauseum.
Nonetheless, I read the story anyway -- and I'm glad I did. Because NYSE Euronext CEO Duncan Niederauer didn't just tick off the standard list of Sarbox problems when he spoke to a National Press Club audience Tuesday. Sarbox is on his list of concerns, but it's not the biggest one, it seems.
Niederauer said companies are "voting with their feet" and leaving U.S. markets also because of the fiercely litigious environment in the U.S. and because the U.S. has not yet adopted the International Financial Reporting Standards that most countries use. Though the changes that have been made to Sarbanes-Oxley implementation guidelines are a good start, he also noted that the U.S. needs to do its part to create a "barrier-free securities market."
Based on what I've read recently regarding the ever-increasing trend toward globalization, it seems that in order to compete, the U.S. will, in a sense, need to better cooperate with the other players.