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Sarbanes-Oxley, Corporate Federalism, and the Declining Significance of Federal Reforms on State Director Independence Standards

36 Pages Posted: 31 Jul 2006  

Lisa M. Fairfax

George Washington University - Law School

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.

Keywords: Sarbanes-Oxley Act, federalism, corporate law

Suggested Citation

Fairfax, Lisa M., Sarbanes-Oxley, Corporate Federalism, and the Declining Significance of Federal Reforms on State Director Independence Standards. Ohio Northern University Law Review, Vol. 31, p. 381, 2005; U of Maryland Legal Studies Research Paper No. 921036. Available at SSRN: https://ssrn.com/abstract=921036

Lisa M. Fairfax (Contact Author)

George Washington University - Law School ( email )

2000 H Street, N.W.
Washington, DC 20052
United States
202-994-4630 (Phone)

HOME PAGE: http://www.law.gwu.edu/Faculty/profile.aspx?id=16144

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