Sarbanes-Oxley and its Impact on Marketing/Advertising
Arthur A. Anderson
Morgan Anderson Consulting
Sarbanes-Oxley is in the air. Everywhere.
When SOX came into being in 2002, “good governance” became a corporate mantra and a highest priority from the boardroom to the executive suite. With senior executives subject to fines of up to $5 million and prison sentences of up to 20 years – as well as board members potentially subject to personal liability – it's no wonder. But there is much more to SOX than that. Good governance under SOX is making sure that owners and prospective owners alike know what they are buying and holding. But as in so many areas of life, the answers to this are in the details.
The link between good governance and marketing is reputation. Reputation affects stock price, brands, marketing, and revenues. Brands are reputation surrogates. Advertising – and this includes direct marketing, promotions, interactive, public relations, events/placements, and other marketing communications disciplines is part of marketing. The new reality is: customers vote with their feet, and investors vote with their checkbooks. For large U.S. companies and most global companies, minimizing reputation risk and brand damage is one of today's biggest business challenges.