Too Much SOX Can Kill You — Resolving the Compliance Paradox

In recent years, corporate missteps have wiped out hundreds of billions in shareholder value in industries ranging from telecom to energy to healthcare. CEOs have lost their jobs. Investors have lost their money. Employees, suppliers, and customers have lost their livelihoods. Most important, the marketplace has lost its confidence in the effective stewardship of corporate assets. The result has been an onerous wave of regulatory reform that threatens to hinder growth and innovation, as boards and senior executives scramble to comply and insulate their firms from scrutiny.

Is this new, more stringent environment an overreaction to the damage done by a few bad apples, or is the rotten fruit a symptom of a systemic flaw in the governance mechanisms of modern corporations? According to our research and client experience, the problem runs deeper than a few bad apples. It reflects fundamental deficiencies in existing approaches to corporate risk governance.

Booz Allen Hamilton's Reggie Van Lee, Chris Kelly, and Jim Newfrock are the authors of "Too Much SOX Can Kill You — Resolving the Compliance Paradox."