Directors call for Sarbanes-Oxley repeal

More than half (58%) of directors in the US feel Sarbanes-Oxley regulations should be repealed or overhauled, according to the latest study from Korn/Ferry International.

Sarbanes-Oxley regulations were introduced four years ago to improve governance, but a staggering 72% of responding directors in the Americas believe that the regulations have made them too cautious; not taking the necessary risks to drive growth. This view is shared in the UK where 61% of directors view the Combined Code as too restrictive.

But, unlike the US, only 28% of UK directors believe that a complete overhaul or repeal of the Combined Code will remedy the situation.

'Although gross corporate misconduct has necessitated recent landmark regulations, there is a growing contention that the impact of these rules has been negative,' says Charles King, head of Korn/Ferry International's global board services practice.

The Board of Directors Study examines opinions and practices found in boardrooms of major corporations throughout the world. The findings are based on the responses of nearly 1,200 board members from 15 nations in the Americas, Asia Pacific and Europe.

The study shows that directors worldwide are more discriminating when accepting directorship invitations due to perceived risks. 59% of directors surveyed in the Americas have declined a board position due to the risk associated. Risk was also characterised as the determining factor in turning down board seats by 83% of surveyed directors in Australasia, 77% in Switzerland and 68% in non-Japan Asia.