Non-Profits Embrace Sarbanes-Oxley
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Non-profit and private organisations are continuing to implement best practices and aspects of the Sarbanes-Oxley Act. The move is despite Sarbanes-Oxley never having been intended for non-profits. Foley & Lardner LLP's third annual study The Impact of Sarbanes-Oxley on Private and Nonprofit Companies found that such organizations are self-imposing such rules and that in some cases are doing so more aggressively than their publicly listed counterparts. "For the past three years, executives of private organizations have told us that the standards outlined by Sarbanes-Oxley are being adopted as best practices for a variety of reasons," explained Paul D. Broude, study director and Foley partner. "Some organizations are feeling pressure from auditors or board members to adopt these standards, while others are doing so in anticipation of an upcoming IPO or sale. """Regardless of their reasoning, one thing is clear: the time-consuming and often costly provisions outlined by Sarbanes-Oxley are having an impact that reaches far beyond public companies and into the private and nonprofit sectors."" "Findings suggest though that organizations have reached a plateau or "steady state" and have implemented all the governance they are going to "Broude went on to explain that one reason for increased adoption among nonprofit organizations could stem from the fact that a large number of directors who sit on nonprofit boards also serve on the boards of public companies. These directors are therefore more familiar with the Sarbanes-Oxley Act and more likely to recommend adoption of similar governance policies by nonprofits. "
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