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News < Back Sarbanes Oxley : Law : Survey Foley & Lardner Wants Your View on the Cost of Corporate Governance U.S. Executives Given Opportunity to Share Information on Impact of Sarbanes-Oxley on Public, Private and Nonprofit Companies
?As companies continue to feel the bottom-line effects of Sarbanes-Oxley and other reforms, this survey is a great opportunity for executives to have their voices heard in the corporate governance discussion,? said Tom Hartman, Study Director and Partner with Foley & Lardner. ?This is even more timely with the announcement last month that the SEC is creating a committee to examine the impact Sarbanes-Oxley is having on smaller public companies.? This year?s survey asks public company executives to comment on the increased costs associated with Sarbanes-Oxley and other SEC and SRO governance requirements, including audit fees, director fees and costs associated with Section 404. For private and nonprofit companies, the survey will ask executives about the increase in costs due to market- and self-imposed governance requirements. The results of the 2005 private and nonprofit company survey will be announced March 10 at Foley & Lardner?s National Directors Institute in Chicago, while the public company results will be announced in May. Foley & Lardner?s initial 2003 study surveyed small-, mid-, and large-cap public companies to measure the financial impact of Sarbanes-Oxley on public companies. The study was the first of its kind to shed light on the bottom-line impact Sarbanes-Oxley and other corporate governance reforms had on U.S. companies. The 2004 study revealed the continued financial impact of governance reform on public companies and provided an initial look into the financial impact of Sarbanes-Oxley on private organizations. It found that 21 percent of public companies were considering going private as a result of new corporate governance and disclosure reforms, up from 13 percent in Foley & Lardner?s 2003 study. Specifically, the 2004 study showed: • The average cost of being public for a company with annual revenue under $1 billion increased $1.6 million (130 percent) from the inception of Sarbanes- Oxley through 2003. • 67 percent of public companies surveyed responded that new corporate governance and public disclosure reforms were too strict, up from 55 percent in Foley & Lardner?s 2003 study. • Audit fees for public companies increased an average of 23 percent between 2002 and 2003. Executives of private companies were asked to comment on corporate governance regulations. The study showed: • 77 percent of the participating private organizations believed that Sarbanes-Oxley has impacted their organizations. • 60 percent of the participating private organizations had self-imposed new corporate governance controls. Other common factors influencing the decision to adopt stricter corporate governance standards included pressure from board members and/or auditors. For information on Foley & Lardner?s third annual National Directors Institute on March 10 in Chicago, please visit www.foley.com/ndi. Foley & Lardner is a provider of legal counsel to global companies. The firm?s experience encompasses a full range of corporate legal services. Foley & Lardner?s nearly 1,000 attorneys understand today?s most complex business issues including corporate governance and compliance, securities, mergers and acquisitions, litigation, labor and employment, intellectual property and IP litigation, and tax. The firm offers total solutions in the automotive, life sciences, financial services, insurance, health care, energy and sports industries. 
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