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Chapter 9. Looking Ahead: The Core Roadm... > New Standards for Corporate Reportin...

New Standards for Corporate Reporting

Regulation tends to work only in reaction to discovered problems. So, even if a reformed system is better funded and has more teeth, it remains reactive rather than preventive. Some provisions of Sarbanes-Oxley are intended to prevent abuses by corporations and executives; but that will be effective only to a degree. If executives are determined to raid the corporate wealth for self-enrichment or to deceive investors and regulators, they will find a way; regulatory oversight may be preventive in some aspects, but it really only works after the damage has been done.

It makes sense to accompany the new regulatory environment with establishment of higher standards for corporate governance, on a voluntary basis. Several publicly listed corporations already have taken steps to expense options. Communication at the corporate level may be more effectively designed to address the stockholders' needs and concerns, and not merely to comply with the law. The steps to true reform in corporate governance would include the following:


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