Our heads are still aching from drinking one (okay, three or four) too many margaritasin honor of Jeff Skilling, the guy at the helm when Enron hit the iceberg of its financial gambles who yesterday got hit with a sentence of 24-years or life (whichever comes first). So it is comforting this morning to know that it’s not just us tequila-quaffing kids who are skeptical about increasing the risk of criminal liability for American corporate executives.
U.S. Treasury Secretary Henry Paulson said he is considering recommending changes to the 2002 Sarbanes-Oxley corporate governance law because its restrictions have overwhelmed some American companies.
While the "net result'' of stricter reporting standards for executives has been positive, Sarbanes-Oxley has also contributed to "an atmosphere that has made it more burdensome for companies to operate,'' Paulson said in an interview today from Washington.
"We're going to need to look at how we can address some of these issues,'' Paulson said. "This is something we're giving a lot of thought to.''
Paulson's comments come as business groups press the Bush administration to loosen the Sarbanes-Oxley restrictions. The U.S. Chamber of Commerce and other groups say the law stifles innovation and puts corporate officials, who must certify the accuracy of their financial results, at risk of prison terms.
"We as a country do as good a job as any nation of shining a light on a problem when a problem occurs,'' Paulson said in the interview. "Oftentimes the pendulum will swing too far.''
If he keeps this up, we're going to start feeling bad about the whole "tree-hugger" thing.
Paulson Says Sarbanes-Oxley Adds to Companies' Burden [Bloomberg]