Mayberry 2005: Question 7 Regulations

Student Question: What impact has Sarbanes-Oxley (SOX) regulation had on your business?

Jean Kinney: Sarbanes-Oxley implementation within our social organization. So I have a lot of experience with it. I would say overall, for companies that have good processes and have good internal controls then, we've been fortunate to be in that position. It hasn't had a huge impact. The key thing has been that it's not enough to do a good job. You have to be able to document and prove that you're doing a good job. So there's a little bit more documentation. But, our experience is that our organizations, there's a very strong correlation between good business results and good internal controls. So if you have good processes, good operational processes, good accounting processes, you tend to have good business results. So I would say overall the impact has been minimal, because we feel like we had a lot of that in place to begin with. So I do think there are some benefits to shareholders from the transparency that it provides. So there's a little more documentation and a little bit more work. I think that some of what you see in the press around how much work this is a little bit overblown, in my opinion.

Dr. Reimann: Was it your legal background that got you involved in that, you think?

Jean Kinney: Yeah, I think, to a large extent. I kind of understand this stuff.

Dr. Reimann: Well, that's an interesting snapshot on what's going on. Any other Sarbanes-Oxley kinds of things at this point?

Joe Dehler: We have a privately held company which has been an interesting experience for me. Some of the regulation and constraints that come from the market and are being publicly traded, I actually miss, believe it or not. We have to force ourselves to maintain that discipline and transparency and the great news is, our CEO has stood up in front of the company many times and said we are going to treat ourselves exactly the way we would be if we were publicly traded. We're going to have the same rigor and discipline, so in our case, it's been nothing but a benefit, really.