Paper on Sarbanes Oxley and Corporate Governance
This decision has implications on the validity of other Sarbanes-Oxley Act provisions, including the Board. The decision was that SOX’s whistleblower protection clause does not apply to employees who had prior knowledge or information about alleged misconduct before reporting it. The ruling creates a precedent that could affect future cases. Employers may not protect employees who are aware of misconduct before they file a complaint.
Additionally, it also weakens the board’s power as an independent regulatory body, as they were unable to provide protection for these whistleblowers even when evidence of misconduct existed. This could potentially lead more companies disregarding SOX’s provisions altogether, resulting in increased levels fraud/corruption taking place with little legal recourse against such activities.
Finally this ruling could also mean greater uncertainty among investors going forward as well; if regulations are not adequately enforced then there is greater risk associated with investing capital into a particular company leading some people choose invest elsewhere instead – thus hurting business in both short long term by reducing share prices/shareholder confidence.
While this decision is not likely to have a drastic effect on the validity board or SOX, it does show that there are challenges when dealing these issues. Everyone involved should be reminded of how important it is for them to keep an eye out and pay attention.