An Allegory of Good (and Bad) Governance: Applying the Sarbanes-Oxley Act to Nonprofit Organizations
Abstract
Clearly, change is coming to the nonprofit governance arena. Given the scandals which have shaken the public trust in nonprofits and the overall skeptical view of large organizations in light of the even greater corporate scandals, it seems just as clear that change is in order. Attention must now be paid to ensuring that any reforms are specifically tailored to nonprofit organizations, rather than imposing mere cut-and-paste provisions borrowed from the for-profit sector. It is imperative that any regulations that are promulgated recognize that nonprofits are not similarly situated with the forprofit mega-companies that inspired the Sarbanes-Oxley Act's passage. Any imported provisions should be altered so that they are flexible enough to avoid imposing overly costly requirements or structures on cash-strapped nonprofit organizations.168 A frequent criticism of the Sarbanes-Oxley Act has been that it was passed with undue haste and without thorough consideration of all the consequences of its provisions. Legislators should note this criticism, and consider carefully the possible ramifications of applying parts of the Act to the nonprofit sector before passing any analogous legislation.
Recommended Citation
Szymanski, Wendy K.
(2003)
"An Allegory of Good (and Bad) Governance: Applying the Sarbanes-Oxley Act to Nonprofit Organizations,"
Utah Law Review: Vol. 2003:
No.
4, Article 4.
Available at:
https://dc.law.utah.edu/ulr/vol2003/iss4/4