SEC Chairman Sees Progress One Year After Sarbanes-Oxley
Securities and Exchange Commission (SEC) Chairman William Donaldson marked this week’s first anniversary of the landmark Sarbanes-Oxley Act by noting the progress made in cleaning up corporate America and outlining a list of reforms still ahead.
The legislation has fostered "the spirit of integrity and renewal of confidence that goes well beyond the letter of the law," Donaldson said at a news conference. However, he added, "There’s much, much work still to be done."
He noted a "spirit of integrity" that has brought investors back to the markets in the wake of accounting scandals at Enron, WorldCom and others, as well as the demise of the nation’s No. 1 public accounting firm, Arthur Andersen.
Sarbanes-Oxley created the new Public Company Accounting Oversight Board (PCAOB), outlined new penalties for criminal wrongdoing and called for stricter supervision of publicly held companies.
In an interview this week with the Associated Press, Donaldson said he is concerned that some companies and executives are still not fully onboard the reform bandwagon and he is particularly worried about the underfunding of pensions, hinting that the pension sector could be the next to receive reform attention.
Pension accounting "is murky and needs a lot of attention," Donaldson told the AP, adding that SEC and Labor Department investigations are ongoing.
Donaldson said he is confident the Sarbanes-Oxley reforms have brought investors back to the stock market, fueling a recent upturn in the market’s performance.
"Clearly investors have gotten back into the market because they like the market," he said during the AP interview. "Clearly a part of that is a feeling that the change is under way. ... People recognize that we have a rigorous program under way."
He added that the areas of lavish CEO pay packages, stock options and mutual funds need additional scrutiny.