Press & News

Jerry Maatman Published in National Underwriter Property & Casualty/Risk & Benefits Management
01/30/2006

The January 23, 2006 issue of National Underwriter Property & Casualty/Risk & Benefits Management features an article by Jerry (“Nonpublic Firms Can Benefit from SOX”) which outlines how nonpublic companies can benefit from the enhanced corporate compliance practices mandated by the Sarbanes-Oxley Act (“SOX”), even though key portions of SOX apply only to public companies.

“Nonpublic companies and their management teams can enhance their corporate compliance strategies with SOX,” Jerry writes. “This includes addressing corporate culture issues, establishing enhanced governance and oversight controls, creating better responsiveness by board members and senior management, and adopting reporting and risk assessment practices for continuous focus on compliance issues.”

 Why would a company adhere to SOX if it is not required to do so, especially since compliance means a significant drain on company finances and time? Jerry provides a host of reasons: Any private company planning to become public would become subject to SOX, so adopting its mandates in advance would be a boost to the acquisition process. Most investors, financial institutions, customers and vendors prefer to do business with companies that implement sound corporate governance practices. Certain steps which upgrade corporate governance standards -- such as adding independent directors to the board of directors, hiring an independent audit committee, and establishing formal standards for director responsibilities and qualifications -- provide both objective advice and a system of checks and balances to a company’s audit, financial and internal control processes. Good corporate governance strategies and internal accounting controls, Jerry concludes, enhance the value of a nonpublic corporation.