Document Type

Article

Publication Date

January 2005

Keywords

Sarbanes-Oxley Act, federalism

Comments

Published in Ohio Northern University Law Review, v. 31, 2005.

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.