Just four years after the enactment of Sarbanes-Oxley, 58% of Board Directors surveyed feel that the regulations have served only to make boards overly cautious, and should be repealed or overhauled, according to the 32nd Annual Board of Directors Study, released today by Korn/Ferry International.
"Although gross corporate misconduct has necessitated recent landmark regulations, there is a growing contention that the impact of these rules has been negative," says Charles King, head of Korn/Ferry International's Global Board Services Practice. "Many directors believe boards have become exceedingly wary and are not taking necessary risks to drive company growth. These directors are demanding reform."
The Board of Directors study examines opinions and practices found in boardrooms of major corporations throughout the world. The findings are based on the responses of nearly 1,200 board members from 15 nations in the Americas, Asia Pacific and Europe.
The study found that 72% of respondent feel that Sarbanes-Oxley has made boards more cautious, rather than improving governance.
The regulation has also made executives reconsider taking board seats, with 59% of directors have declined a board seat because of the risk associated.