First the Monday a.m. headline on MSN Money's Web site says "Stocks Struggle…" and then another headline indicates, moments later, that stocks are rising (suddenly, within a short timeframe, stocks are not struggling?) because the U.S. Supreme Court found parts of Sarbanes-Oxley unconstitutional. The "parts" seem to strunk down to the fact that the supremes found it unconstitutional that the president was unable to fire members an audit committee. As always, I wonder if the headline writers for print and online newspapers have a clue about anything.
Sarbox has been a boon to accounting firms that audit, providing incredibly profitable additional work to meet federal requirements.
Currently, I see some movement towards more independent corporate boards and chairmen with teeth, however most boards still seem to be collections of cronies who rubber-stamp CEO suggestions. If Sarbox is designed to produce CEOs and boards with 100% focus on shareowners, I'm not sure that the act has been a success. Too often, the shareowner is thought of as some distantly related company satellite, way out there in space. When the shareowner squawks, management often seems shocked. "Who are those people?" the CEO seems to wonder.
If Obama & Company fine BP, is the fine levied against the company or its shareowners? This is the risk part of capitalism in action — BP's fine and long recovery process will affect its shareowners. Who elected the CEO? The shareholders, that's who.
