A Business Ethics Perspective on Sarbanes-Oxley and the Organizational Sentencing Guidelines

This Article assesses the ability of Sarbanes-Oxley and other recent changes in the law and stock exchange listing requirements to reduce the incidence of fraud and to increase the reporting of financial misconduct. It begins by examining the individual decision-makers within a corporation and analyzing their intentions and behaviors under the Theory of Planned Behavior. It then examines the ability of the organization to influence the employees’ intentions and behaviors through codes of ethics and compliance programs, and finds growing support for the usefulness of integrity based compliance programs. Finally, the Article considers how the Sarbanes-Oxley legislation and Organizational Sentencing Guidelines modifications influence corporations to adopt compliance programs and to proactively manage their organizational cultures in a way that improves the ethical behavior of their employees. It also provides additional reform proposals related to the structure and processes of the firm, and discusses the role of the law in incorporating intermediary groups into the process of assisting and encouraging firms to develop ethical corporate cultures.