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How To Create More Jobs
TechDirt is spotlighting a call by Michael S. Malone, a columnist for ABCNews.com, for letting Silicon Valley create jobs once more. Malone argues that Sarbanes-Oxley and other attempts at accounting reform have done little to prevent fraud, but in fact have managed to kill off an entrepreneurship-venture capital-IPO cycle, centered in Silicon Valley, that has taken 30 years to nourish. Here's TechDirt: "...it's time to roll back SarbOx and other accounting rules that have acted more for theatrical purposes rather than any legitimate reason. Basically, all they've done is create new reporting requirements that do little to nothing to either prevent fraud or clarify a company's actual financial position (its intended purpose). I'm all for radical transparency in financial info, but that's not what has been done. Instead, we've made it burdensome to actually grow a company — and that doesn't help create jobs. It helps kill them."
It created a whole breed of IT "professionals", people who creep out of the woodwork and latch onto the latest buzzword-compliant, (typically) Government-sponsored/mandated thing, and ride it until the next one comes along.
I want to delete my account but Slashdot doesn't allow it.
But there is a silver lining: capital is no longer necessary to start companies.
That's very true for software-based businesses. However, imagine someone with a great idea for a new type of processor that wants to compete with Intel. There's a LOT of capital required for manufacturing-based businesses in order to do proper R&D, establish factories, and so on... assuming the concept is so radically different that it can't be outsourced to existing fabrication plants.
Advertising that I'm a girl on Slashdot since 2008.
Ummmm, that's been the plan for YEARS. The only thing that changes is the name of the company that you hope will buy you.
I could make the argument that it is "IP" patents that are the real problem.
Then they need to get rid of it because it isn't working, but they are going to need to replace it with something else that does work.
Currently, part of the problem is that the financial world is hidden. Oh just trust us, we know what we are doing. Well after 2 bubble bursts, people are really wary of investing in anything, because there isn't any reliable information and there isn't any repercussion if someone lies about financial dealings.
So I don't think repealing Sarbanes-Oxley is the answer, unless something is put in its place that will help give investors confidence in their investments.
I for one have pulled completely out of the market and I know of others that have also. Now the big question is if and when do we get back in. Right now there is nothing happening in the financial market, that indicates to me that things are going to improve. So why should I put my money into something that is going to crash again in 2 or 5 or 7 years.
He who said 1,000,000 monkeys on 1,000,000 typewriters would eventually type the great novel, never saw an AOL chat room
That tax should be a Money transfer Tax, for example 15% when you get paid, buy something, transfer money. etc.
Yessiree, that will keep capital circulating! Nothing inspires a person to move funds into a position to better fund a promising new company or other investment than to take 15% of that money away from you for seeing the opportunity. Yes! Punish investment! That should get some new companies and jobs under way.
Don't disappoint your bird dog. Go to the range.
Too many qualified Americans rejected so that H1Bs can replace them (for the same money). Makes no sense whatsoever. Cancel the H1Bs.
Damn straight. Those Soviet guys got it right the first time, didn't they? Absolute total control over business... by unaccountable appointed bureaucrats.
Seriously. Were you dropped on your head as a teenager?
SOX was passed so that politicians could look like they were "doing something" after the whole Enron debacle. Okay, fine; politicians have to look like they're "doing something"--but unfortunately for us, "doing something" involves passing new laws, and every law that passes is a minor freedom that is revoked.
The real irony of Enron was not that it was a failure of having the right regulations in place, but a failure of enforcement: the guys running Enron went to jail for breaking pre-SOX laws.
That's the thing that irritates me the most: politicians always have to look like they're doing something, when in fact, the right thing for them to do is nothing, except, perhaps, hold a hearing to find out why enforcement failed. And sadly, enforcement fails more often than not because we don't spend enough money on enforcement because we're busy trying to figure out how to enforce the new legal requirements.
The whole legal framework is bug laden and a perfect example of the Lava Flow Anti-pattern. What we need is for politicians to go through and rewrite the law to simplify it, rather than to add more and more layers of nonsense.
As a footnote, every time someone says that some section of our economy is insufficiently regulated, I laugh out loud: nearly every aspect of the financial system (such as financial derivatives) exist as a side effect of the current regulatory framework. It's not that we don't have enough regulations--it's because the existing framework is buggy.
Your post title, "Misses the point!", is quite appropriate, since that's exactly what you did. Sarbox prevents large private businesses, startups, that aren't publicly traded from making the transition to being publicly traded, because of the incredible expense associated with getting into compliance. In other words, the millions a year it costs is acceptable to already publicly traded companies, but the millions that much be spent precludes non-publicly traded companies from making the transition, significantly raising the barriers to entry.
You don't make the poor richer by making the rich poorer. - Winston Churchill
"Yessiree, that will keep capital circulating! Nothing inspires a person to move funds into a position to better fund a promising new company or other investment than to take 15% of that money away from you for seeing the opportunity."
It will keep the capital moving. Moving to the Cayman Islands, to Switzerland, to Monaco etc.
Knowledge is power. Knowledge shared is power lost.
People as clueless as Mr. Malone are entitled to their opinion, but should not necessarily be entitled to having that opinion published in a national newspaper. Of course that would disqualify the entire WSJ editorial page.
2008 was indeed a disastrous year for IPOs. Here are the figures for the last several years:
2008: 43 IPOs (not 8)
2007: 272
2006: 221
2005: 214
2004: 217
2003: 70
(source: http://www.ipohome.com/ipohome/Review/2008main.aspx and several other places)
Now note: there were 33x as many IPOs in 2007 than 2008. This means that we can't say this was because of SarbOx because we had SarbOx in 2007. It is possible that adjusting to SarbOx was the problem in 2003, the year SarbOx went into effect, but SarbOx can't explain the change from 2008. Still, the writer might not be completely clueless. He knows enough to cherry pick years that were before SarbOx went into effect and which had higher numbers of IPOs than in 2008: 1999 (269), 1996 (272) and 1986 (365). However, it would appear that the years 2004 through 2006 were fairly normal for IPOs, with 2007 being an unusually good year.
So with respect to 2008, I'd venture, without doing any kind of extensive research into this, that something else might happened in the capital markets in 2008. The editors of the WSJ might want to look into it.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
Astounding how we, as a country, can have comments like the ones in this thread, and like the ones in TFA, that continue to stand up for deregulation of the financial markets, having less accountability, requiring less transparency, while the entire system is collapsing precisely because of a lack or regulation, accountability, and transparency.
You all are standing in the lobby of a skyscraper that is collapsing, preaching to the screaming people who are frantically running out the doors that 'this is exactly why we should enforce less standards when we build skyscrapers!' Everyone is looking at you like you are the retarded maniac that you probably are.
*Gasp* an internal control audit, you say!? Why, that doesn't make any sense... that a publically traded company (whose business model relies on their business partners, who are private companies, remaining financially solvent) should require those private companies to attain attestation to the effectiveness of their own internal controls? How dare they. That just sounds, so... so...
Responsible!
Silicon Valley used to be about manufacturing. ICs were actually made here, along with many of the products that used them. Intel, National Semiconductor, and HP all had big manufacturing facilities in Silicon Valley. National Semi watches and HP calculators were made in Silicon Valley. Amdahl mainframes were made here. Dozens of disk drive companies made hard drives. Apple used to make Macs in Fremont.
When the manufacturing went offshore for cheaper labor, the production engineering followed. Slowly the fab technology industry moved to Japan and Taiwan. Then the actual IC design work went offshore. Now, the entire consumer electronics industry is outside the US.
Anyway, Sarbanes-Oxley doesn't apply at all while you're venture-funded. Only at the IPO stage does it matter. At that point, you have to provide a very detailed prospectus, which isn't a new requirement. Sarbanes-Oxley isn't that much of a hassle to comply with for a straightforward manufacturing company. Only when the financial structure is "creative", with special-purpose entities, multiple corporations under one parent, and similar gimmicks, is compliance a problem. That's why the WSJ is grumbling - it makes financial gimmicks less desirable.
But you're missing the point... America is the country of the free [market|people|beer|music].
People need to be free to wantonly misrepresent their publically-traded finances, how else can they mazimize their personal gain?
People need to be free to lose their retirement savings because they invested in a company with sham accounting.
Only by allowing people to be misled by the Captains of Industry can we expect them to learn to stand on their own two feet and get rich or die trying.
Why do you hate America, Mr.-I-don't-think-people-should-be-free?
...
[I agree with you 100%. But it's important to note that free-market idealogues really don't care about responsibility... or if they do (like Alan Greenspan) they eventually learn that companies will not self-regulate to act responsibly when the decision-makers in those companies benefit from acting irresponsibly.]
"Trolls they were, but filled with the evil will of their master: a fell race..." -- J.R.R. Tolkien on Olog-hai
SOX was the reaction to a series of big financial scandals, with the Enron affair being the best remembered. But back then, the reaction of many financial experts was to point out the deficiencies of SEC oversight and the weaknesses of the American GAAP accounting rules. The suggested answer was to seriously improve SEC oversight and adopt international IAS standards for accounting.
Instead we got SOX, an only too typically American solution, which puts its faith in forms and auditing. I think at the root of this is the Protestant mindset brought along by the Pilgrim Fathers, which insists that if something is printed on paper it must be true. It is the same mindset that requires travellers to the USA to confirm in writing that they are not terrorists.
And we got -- yes! -- another big financial crisis, caused by lax SEC oversight and creative financial practices. Well, even bigger and badder, if that helps.
Some people never learn...
how about we get a system of enforcing the standards first? Last I heard, H1B enforcement was a joke - want to hire some guys from China? Post a ridiculous ad in an obscure publication, hire nobody, then import your guy. It's a hassle when the guy is legitimately unique/hard to find, but can be gamed easily. And if you abuse/violate the rules? How many people are there to bust you? Not many.
"We returned the General to El Salvador, or maybe Guatemala, it's difficult to tell from 10,000 feet"
Ok, you've got my interest, but please state your affiliation. Are you involved with fairsoftware in any way? I read your previous comment, and that made me look the company up, but I didn't do anything at that point.
I've tried twice to start the same company (MMO games programming software house) in the last two years, but each time I've failed because the people who stated interest weren't really keen on the amount of work involved.
Skeptical I may be, interested I am, but I have a good memory, so be honest, are you affiliated? Or just a satisfied customer?
A learning experience is one of those things that say, 'You know that thing you just did? Don't do that.' - D. Adams
Wildfires, earthquakes, and floods do not time the market for the "right" time to liquidate. If AIG was hit by a large claim (they are an insurance company after all) that required that they dip into their assets, what value would they have gotten when they liquidated their hypothetical bond? The amount that they could sell it for that day. If AIG cannot raise the funds it needs to service its customers, it defaults and the US government picks up the tab. These are the reasons for regulations on insurance companies and for Mark to Market.
The first pillar of Basel II already addresses your issue regarding the risk of sovereign debt.
AIG was killed by ridiculous exposure to credit default swaps, not CMOs on their books. It was predefined how they were to pay out in response to mortgage defaults (which they failed to model accurately).
With regard to banks, it's ridiculous to say that they got "screwed" as they were using the value of overpriced assets to overleverage during the credit boom. That rule works to their "benefit" in boom and forces them to stay solvent (or close) in bust.
Frankly the problem isn't that MTM rules are being used too strictly, rather they are being applied too loosely--and we have walking dead banks that NEED TO GET CLOSED soaking up capital from the Fed and refusing to lend. The Japanese had this problem and are warning us not to repeat it.
And if you get busted, do the fines exceed the money you saved by hiring a cheap foreign slave? No? Then why bother comply with it?
In a business, the question whether or not a law is heeded hangs on three questions: How much do I save by breaking it? How likely is it that I get caught? How much is the fine when I get caught? There's nothing else that determines whether a company breaks a law.
Yes, we have laws against dumping oil in the ocean. Why is it still done widely? Because it saves you heaps of money, because it's almost impossible to get caught and the fines are a joke. When the fines do not exceed the money you save by breaking the law, fines are seen as part of the cost of operation.
How about shutting down companies that break the H1 visa laws for a few months to audit them throughly and make them ineligible for more H1 applications? AND create an agency that actually watches over you like a hawk when you hire people from abroad (it's not like the government doesn't know if you do, ya know, you had to get them through a process that involves the government...). You'll weed out those abusers of the worker visa program pretty quickly. Either they stop doing it or they get caught and are forced to stop.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
I am for essentially open immigration into the US. ... provided that we back way-off of the redistributionist, cradle-to-grave welfarism that our government has descended into.
The statue of liberty doesn't say "give me your top 1%, at any cost, and let them contribute to our tax base". It talks about the tired, the hungry, etc. If they're willing to work, I want them. If they want to be looked after, I don't. And I want the federal government to stop "looking after" people born within US borders first.
Ideally, foreign born people who work hard will come to the US and kick _out_ the lazy asses who were born here and expect to be waited on hand and foot by their government (which really means their harder working neighbors).
Unlike many other cultures or nationalities, definitionally, there is no common ethnicity, culture, bloodline, geography, or anything else that makes citizens of the USA "Americans". We are (historically) United only by our voluntary adherence to the rule of law. When we lose sight of our shared law, what are we? We have nothing else in common.
It is my opinion that the current generation of Americans (and who knows how many prior generations) are hardly Americans at all. We're more than willing to dispense with the rule of law and to vote ourselves or our interests more powers than are strictly legal, should it so suit us. The new generation of Americans thinks themselves something different than those bound by a common constitution that is applicable to any man who chooses to live under it. And the result is that we're back to the same old tricks of juding people based on where their parents came from, rather than how hard they work and how well they can keep our laws.
Rules regarding how much a man can sell his labor for (i.e. minimum wage laws) are some of the most insidious repressants of the poorest and least talented members of society.
The H1B system is quite odd: people who are talented wage earners cannot afford to float between jobs looking for something better and must jump at unattractive positions in order to stay employed. Yet people who are low-skilled or who elect not to work at all are not deported, and if they score the trifecta and add _another_ dependant entity to our welfare system (i.e. they have a kid) then they have cemented their place in the US legally.
As usual, our foolish government meddling works against us. We ensure that unemployed people stay in the US and "in the system". And we make it hard for high-skilled people to negotiate effectively for their true worth.
Finally, I do a fair bit of tech interviewing. There is a real shortage of US-born/US-resident workers that meet our requirements. I'm not talking about a shortage of people that will work for the palrty wage we're offering: I'm talking about people that we're willing to make an offer to at all. We look for them anywhere and everywhere, and I interviewed 25 people at a college campus recently. Half of them where white-bread America and half of them were foreign-born US students.
My opinions are my own, and do not necessarily represent those of my employer.
A test of internal controls has nothing to do with a company's solvency. A company can be hemorrhaging cash and have excellent controls in place to protect from theft of money and information.
The argument is that the law of diminishing returns applies to government regulation and you can reach a point of over-regulation. Since law is not a monolith we have passed that point in some areas and clearly haven't in others.
There are still people who believe that government cannot solve every problem, and, to stay on topic, the current financial crisis happened with SOX in place. The real problem is that government requires businesses to invest in unprofitable markets and then deregulates when the businesses complain about being over regulated. They create a company (Fannie Mae) then allow said company's leadership to contribute to its regulators in Congress. After 20 years of new laws, unwillingness to repeal older laws, and turning a blind eye, the system is left to teeter until it does the inevitable.
SOX and all the other auditing standards don't ensure accountability or transparency. As will most regulations the penalties are almost never enforced until something goes wrong. You can run a business with shady practices for years providing SOX certifications, SAS70 reports, and any other type of certifications and unless something goes wrong no one will ever know. To your point: Government regulation won't solve the problems of the financial market. Markets cease to be true markets when the hand of government is involved. The real problem is that companies are not held accountable for their failures. Government/corporate bailouts, subsidies, protectionism, and other forms of manipulation only serve to isolate society as as whole from inherent market risks....thus increasing our tolerance for risk and not having to deal with the true consequences of failure. Increased regulation will only push us more in this direction.
People who bite the hand that feeds them usually lick the boot that kicks them
Small companies like Toyota with hybrid cars? Or the advances in cell phone technology like Samsung and Nokia? High definition television? the International Space Station? The fact is most innovation comes from bigger companies. Google is so amazing because PageRank was an innovation. Most other startups are only applying existing technologies in a new way.
Why doesn't Slashdot ever get slashdotted?
I am not quite sure how recycling lots and lots of existing code leads to "groundbreaking" software.
I am not even convinced that code is the roadblock.
Microsoft gambled on "the ribbon" and won.
But Microsoft has the money and manpower to study office work and the office worker in depth.
It can bring graphic and UI design teams into the picture. Experts in a dozen specialties. It can recruit thousands or tens of thousands of test subjects.
The developer living out his fantasies of independence on a diet of Jolt Cola and Ramen Noodles isn't going be able to do that.
Which is why it's better to be compliant long before you are required to be.
Maintaining compliant processes is easy and relatively cheap. Replacing non-compliant legacy processes is expensive. The lesson? Don't have non-compliant legacy processes, and you'll greatly reduce the cost of going public.
"Trolls they were, but filled with the evil will of their master: a fell race..." -- J.R.R. Tolkien on Olog-hai
Which means that if I tried to sell that $100 treasury on the bond market, I may only get $50 for it.
I know you're just using it as an example, but you're flat-out wrong. You might get $101 for that $100 t-bill.
There has been enormous demand for t-bills, because there are large pools of money that want low-risk investments. Having been burned by AAA-rated securities guaranteed by large insurance companies that turn out to be worthless, there is a flight to quality. Demand for US t-bills has been so high that the return has actually went negative.
In this market, people are willing to loose money so that they are guaranteed the return of almost all their capital.
So, according to mark-to-market accounting, my $100 treasury bought five years ago for $70, whose face value if I simply computed it's value by compound interest would be $85 is actually only worth $50.
How else can you determine the value of an asset? What you are proposing is making up the value just because you think it is worth that much. You could be right OR wrong.
You think the guarantee of the US government is good, but other people might not think so.
Or, you think the guarantee of the US government is good, but you might think the US dollar is going to rapidly decline against other currencies, so the value of a US t-bill would be less on the world market.
Or, if interest rates shot up to 11%, the value of your t-bill paying 4% would drop significantly.
How can you judge the relative default risk of US t-bills, German t-bills, Equador t-bills? The market is usually good at that.
And it means if I have the regulatory requirement to have a certain asset to liability ratio, my treasury bonds, which are completely and totally secure--the U.S. Government so far has not defaulted on a single treasury--is insufficiently "secure" for accounting purposes.
Because they aren't totally secure. They are probably the most secure thing you can buy, but there is still a chance that the t-bill MIGHT not be paid. It is possible for the US government NOT to pay. After all, a year ago, would you consider that the government of Iceland wouldn't make good on its promises? Today that is a real possibility.
The way the US government has been spending huge amounts on TARP funds and other bailouts, and further problems with the economy, the default risk on t-bills today is probably higher than it has been in 15 years. While I doubt they would default on t-bills, who knows what the new US administration & congress will do?
It's the primary reason why some people want to do away with mark-to-market rules: because many mortgage backed securities were trading at perhaps 10 cents to 20 cents on the dollar, even when the most pessimistic default rates in the mortgage market would cause the underlying assets (the houses themselves) which comprise the mortgage backed security to be worth maybe 85 cents or 90 cents to the dollar.
Then I'm sure some bright person will swoop in, buy up the distressed debt, and make a killing when the markets return to sanity. Why don't you do that?
85 cents or 90 cents on the dollar? Ha! Real estate in many, many areas has declined by far, far more than that. In some areas real estate prices have fallen by 50% or more.
Add to that some of the ridiculous rules in some areas that make it difficult to foreclose on a house. In California, you can now live in your house for a year without making a single mortgage payment. That's nice for the homeowner, but lousy for whoever owns the mortgage.
It seems the only way to judge if a mortgage backed security is worth anything is to fully investigate the underlying assets, sinc
The disadvantage of your approach is that the government is really taking that money from the Visa holder, because the salary+application fee should really be the market rate for the position that the company would pay a local resource if one was available. So you're still applying a deflationary pressure to the market rate salary, which discourages people from training for that position on a global level and exacerbates the skill shortage. Alternatively you make it more likely that resource will work for a competing company (or external division) in a country that uses a fixed visa application fee that leaves more money in the budget for his salary. So you're giving the company the choice between exploiting the indentured servitude aspect of that employment (which your approach doesn't fix) or off-shoring the work to a country where they don't have to pay that application fee. So either you're having the government condoning unfair exploitation of workers in exchange for a lottery kickback, or encouraging a corporate off-shoring strategy that results in a loss of tax revenue. And as a bonus, you would make companies have to go through the process more frequently, raising their administrative costs further when there really is a local skill deficit and they have no choice about bringing in out-of-country talent. Oops.
Now your approach would help bring the number of Visas issued down, because the government would have an interest in keeping them scarce to maximize revenue by keeping bids high through exploitation of an inelastic demand curve. But my approach would also do that by discouraging companies that currently use the system to exploit the Visa holders, without penalizing companies that actually require access to critical resources.
If a company's going to pay a lot of extra money to make sure they get they get access to skills, I would much rather that the money go to the people with those skills, thus encouraging others to develop those skills and reduce the shortage, than that the money go into government coffers where its use to actually fix the shortage is less than assured. If the company really needs the person with the skills so badly that they're willing to pay $40,000 more in a visa auction, let them pay it to the worker (who will pay a chunk of income taxes on it anyways) rather than directly to the government.
Laissez lire, et laissez danser; ces deux amusements ne feront jamais de mal au monde. - Voltaire
Toyota didn't invent hybrid drivetrain technology (which has been around for ages) or even the hybrid car; they didn't really invent much, just applied lots of existing technology and used their size and market presence to bring it to market.
Cell phone history seems to include lots of big names like Bell Labs and Motorola, so one point to the big guys there.
HDTV doesn't count as much innovation in my book. It's... TV, just more pixels. Image processing circuitry had been driving computer monitors with higher resolutions for years -- the ball was on the tee for them, all they had to do was not pull a Charlie Brown.
I think you're acknowledging that Google wasn't even a company yet when its founders came up with PageRank, right? Ever since Google got big we've seen them buy more neat stuff than they've written. And generally take on projects that require big size more than big ideas.
seriously. i mean, you might be able to argue that Sarbanes-Oxley is not the correct way to regulate publicly traded companies, but to say that deregulation is the solution is just incredibly stupid considering the history of corporate scandal/corruption we've had in this country.
if companies are being driven out of the U.S. to the U.K., it's certainly not due to the London Stock Exchange being less-regulated. the FSMA 2000, passed by British Parliament two years prior to Sarbanes-Oxley being passed in the U.S., established equally extensive business regulations designed to promote responsible corporate governance and protect consumer interests. and even before the FSMA 2000 the U.K. had one of the best regulatory systems in the world.
if anything, it was the lack of sound business regulations in the U.S. in the first place and the corruption which this unregulated environment created that caused such a public backlash forcing the Sarbanes-Oxley Act to be passed. if U.S. policy makers and industry lobbies hadn't been pushing for deregulation all these years, and had instead adopted the principle-based regulations that have long been employed in the U.K. and the rest of Europe, then there would have been no need for the strict rule-based regulation U.S. companies are now faced with.
ignoring the need for sound business regulations is ignoring the realities of capitalist industries. if you resist sensible regulations that are necessary to protect public interest and societal well-being (with minimal enforcement action), then you invite corporate malfeasance and risk repeating mistakes of the past; at best there will be a public scandal and at worst an economic disaster, either of which will cause politicians to overcompensate for the lack of progressive regulations with reactionary ones like Sarbanes-Oxley. so the author's attitude is exactly what got us into the current situation.
of course, then the author goes on to suggest that we return to Reaganomics, as if tax cuts for the rich have never been tried before (or have ever worked in the past).
... As someone who works (as a regular peon) in a company that used to be a startup but then got sold to "the man" I couldn't agree more.
Our company was a far-ahead-of-everybody-else leader in our sector. Then, six years ago, we got bought by a large public company (finance industry). Ever since then, we have done NO progress whatsoever. The only thing we've been working on is various audit compliance, and implementing different obstacles in progress's place (Sarbanes Oxley being the main one).
We have long gave up the mantle of leadership to other companies. SoX needs to GO!!!
Posting as AC because I would still like to remain employed there (for time being)
Some of us are of the opinion that the current situation was created neither by too much regulation nor too little, but rather by *bad* regulation. The fix for bad regulation is not more bad regulation, but better regulation. Furthermore, if you believe that the government has demonstrated an inability to produce good regulation, you should seriously consider whether less than ideal quantities of regulation are better than a set of bad regulations.
No, I mean laws like those that prevented anyone from offering phone service in competition with AT&T (for one example).
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
Remove the veil of corporate protection from officers and members of the board of directors. Make them, explicitly, jointly and severally, personally liable for all debts and obligations of the corporation. Make them criminally liable for any acts committed by the corporation.
Then you can eliminate SOX. There will still be problems, but you'll have asses to kick.
Is it just my observation, or are there way too many stupid people in the world?