The drama of Sarbanes-Oxley has produced a "trickle-down" effect --- setting de facto standards for not only for large publicly traded corporations, but also for all corporations and non profit entities that rely on the professional advice of outside boards of directors, lawyers, accountants, and auditors.

If your corporate officers do not know what is in the Sarbanes-Oxley Act, and the 12 focus areas it inspired that are important today, an educational seminar for your executives may be in order.

You need to know --- "Could I go to jail for this?"  Potential criminal consequences of the Sarbanes-Oxley (SOX) act are great.  And if you do not have an effective ethics program in place, the Federal Sentencing Guidelines used by prosecuting authorities at all levels may deal you a crushing blow!

There is no doubt that every company must understand the risk of  shareholder litigation and liability for officers and directors of corporations.  There are legal and ethics compliance requirements for financial experts, requirements for independent counsel/advisors and new responsibilities for financial statements.

In legal theory, the Sarbanes-Oxley Act of 2002 only applies to companies that are registered with the SEC.  WARNING: and this is a major warning - a jury can decide that even for the smallest non-public company to fail to take the general types of action required by Sarbanes-Oxley is a violation of the common law negligence standard.  The present public perception of what corporations should do (i.e., what reasonable men would do) is reflected in what the Congress enacted as Sarbanes-Oxley. Therefore, even if your company is not required to register with the SEC,  you should be following the same sort of rules on a voluntary basis. 

It's important, so we will repeat it: Failure to take the types of action required by Sarbanes-Oxley may well be what a jury could decide was violation of the common law negligence standard.  The present public perception of what corporations should do is reflected in Sarbanes-Oxley.  

Many attorneys consider the Sarbanes-Oxley Act of 2002 as a dramatic expansion of the laws affecting corporate governance in decades. They argue that the SEC has now significantly and dramatically altered the traditional corporate attorney-client relationship.  Bucklin does not believe that it significantly alters the existing attorney to client relationship --- but it does dramatically call corporate lawyers to an understanding of the ethical obligations of lawyers that advise corporations.  Bucklin has written about this in his "Neoethics" series.  Seminars on Sarbanes-Oxley ethics requirements are available.  See also, one of the articles about Sarbanes-Oxley (SOX) on this site.

Moreover, and perhaps most importantly, although Sarbanes-Oxley only technically affects companies that must register with the SEC, the effects of this landmark reform legislation have been much broader.  The drama of Sarbanes-Oxley has produced a "trickle-down" effect --- setting de facto standards for not only for large publicly traded corporations, but also for all corporations and non profit entities that rely on the professional advice of outside boards of directors, lawyers, accountants, and auditors.

In the Sarbanes-Oxley environment there are twelve focus areas that are particularly important for corporate boards today.  Hence, they are the ones for the company's Legal Compliance and Ethics Officers to target right now. Read More.

Note for attorneys and investigatory response teams:

In 2008 the SEC released its Enforcement Manual (the infamous "Red Book") to the public for the first time.  Because the manual is intended to provide guidance to members of the SEC’s Division of Enforcement, it is a valuable resource for anyone involved in a SEC investigation. The full text of the Enforcement Manual is available here.

Several sections of the Red Book address the topic of electronic information.  Many of the sections are valuable guidance for those preparing responses to the SEC, to make the SEC feel the respondent "knows what they are doing. For example, section 3.2.6.2, “Form of Production,” provides a detailed explanation of what is expected of those responding to an SEC subpoena, including a discussion of the SEC’s preference for electronic production. Section 3.2.6.2.3, “Format for Electronic Production of Documents to the SEC,” provides even greater detail regarding the production of electronic information, including practices that will help you on privilege logs, bates stamping, records certifications, et cetera.

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Off-the-shelf resources

There are a number of off-the-shelf resources available. E.g., one of the most well known (and advertised) toolset to assist compliance is the aptly named Sarbanes-Oxley Compliance Toolkit.  It is available at http://www.soxlaw.com/tools.htm

We also commend for bedside reading for those charged with implementing Sarbanes-Oxley requirements the book Sarbanes-Oxley for Dummies, by Jill Gilbert Welytok, a part of the series published by For Dummies, The book may be 364 pages, but it is a plain English guide that explains the legislation simply and practically.

But off-the-shelf resources are not what is needed to instruct  top corporate officers.  They need an educational seminar or workshop. Seminars for corporate leaders need to be tailored to the company, if truly effective change is to be accomplished.  The money spent for a customized seminar, given by a real expert with practical solutions and suggestions tailored to your company, is money saved from what would otherwise be future expenses in fixing future governance errors.