Reflections of the Sarbanes-Oxley Act in corporate codes of conduct of Fortune 500 companies.

摘要

Scandals rocked the American economy in the early 21 st century leading to Congressional enactment of comprehensive corporate reform legislation known as the Sarbanes-Oxley Act of 2002 (SOX). That legislation and subsequent regulations included significant deterrents in the form of punishments designed to curtail white-collar criminal activities. The effectiveness, in terms of measurable behaviors, will not, however, be measurable for years.; As an interim measure, the study examined the extent to which SOX concerns are evidenced in consequential terminology used in the corporate codes of conduct or codes of ethics (codes) of America's 500 largest public companies. Use of such terminology could help establish an "organizational culture that encourages ethical conduct and commitment to compliance with the law," as mandated by the 2004 revised United States Sentencing Commission's (USSC) Guidelines Manual.; The study found 478, or 95.6%, of the 500 corporations had readily and publicly accessible codes posted on company web sites in apparent compliance with USSC guidelines that require reasonably communicated compliance and ethics programs.; The study also examined the extent to which codes used consequential terminology to prompt desired behaviors in the workplace. A low level of usage was identified, just under 2 words per 100 code words. Examined codes averaged 5,800 words in length, ranging from 180 to 41,115 words.; Another objective was to identify possible relationships between the level of consequential terminology usage and various performance and descriptive measures for the study's population. No statistically significant relationships were found. Through a stratification of the performance and descriptive measures, a few statistically significant relationships were revealed, although no practical validity could be affirmed since the study did not control for potential confounding variables.; The study also sought but failed to establish a correlation between the observed use of consequential terminology and two independent measures of corporate social responsibility and governance.; The low level of consequential terminology usage in codes suggests large public corporations have not embraced the concept of punishment as a deterrent of undesired behaviors. That places corporations at apparent odds with Congress, federal regulators, and recent studies that evidence actual or threatened punishment can deter undesired behaviors.