Voluntary Corporate Governance, Proportionate Regulation and Small Firms: Evidence from Venture Issuers

Forthcoming December 2017. Canadian Business Law Journal

28 Pages Posted: 23 Mar 2017

See all articles by Anita Anand

Anita Anand

University of Toronto - Faculty of Law

Wayne Charles

Queen's University - Smith School of Business

Lynnette D. Purda

Queen's University - Smith School of Business

Date Written: December 2016

Abstract

Following the implementation of the Sarbanes-Oxley Act, scholars argued that one-size-fits-all corporate governance imposed disproportionately high compliance costs on small businesses, weakening their competitiveness vis-à-vis larger firms. As an alternative, these critics contended that “proportionate regulation,” in the form of regulatory exemptions for small firms, is an appropriate means of minimizing disclosure obligations. While at first glance it may seem that small firms would seek to comply with less costly governance standards, is it possible that they would nonetheless voluntarily adhere to stricter standards? Our empirical findings suggest that proportionate regulation is a misguided regulatory approach given the voluntary adoption of corporate governance mechanisms among small firms.

Keywords: ventures, Sarbanes-Oxley Act (SOX)

Suggested Citation

Anand, Anita and Charles, Wayne and Purda, Lynnette D., Voluntary Corporate Governance, Proportionate Regulation and Small Firms: Evidence from Venture Issuers (December 2016). Forthcoming December 2017. Canadian Business Law Journal. Available at SSRN: https://ssrn.com/abstract=2938690

Anita Anand (Contact Author)

University of Toronto - Faculty of Law ( email )

78 Queen's Park
Toronto, Ontario M5S 2C5
Canada
4169464002 (Phone)

Wayne Charles

Queen's University - Smith School of Business ( email )

Smith School of Business - Queen's University
143 Union Street
Kingston, Ontario K7L 3N6
Canada

Lynnette D. Purda

Queen's University - Smith School of Business ( email )

Smith School of Business - Queen's University
143 Union Street
Kingston, Ontario K7L 3N6
Canada
613-533-6980 (Phone)

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