Sarbanes-Oxley, Corporate Federalism, and the Declining Significance of Federal Reforms on State Director Independence Standards

Authors

Lisa M. Fairfax, George Washington UniversityFollow

Document Type

Article

Publication Date

2005

Status

Accepted

Abstract

Commentators have argued that the Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley" or the "Act") raises federalism concerns because it regulates the internal affairs of a corporation, including the composition of, and qualifications for, corporate boards, in a manner traditionally reserved to states. This Article responds to those claims, arguing that the Act reflects a relatively minimal intrusion into state law, particularly with regard to issues of director independence. This Article further argues that the Act's failure to disturb state law on these issues may impede its ability to tighten director independence standards and by extension may undermine its ability to improve the quality of directors' monitoring of corporate behavior.

SSRN Link

http://ssrn.com/abstract=921036

Recommended Citation

Lisa M. Fairfax, Sarbanes-Oxley, Corporate Federalism, and the Declining Significance of Federal Reforms on State Director Independence Standards, 31 Ohio N.U. L. Rev. 381 (2005).