Most of the indigenous Irish companies that will need to comply with the Sarbanes-Oxley Act, corporate governance regulations haven’t already done so, a supplier of compliance software has said.
The US Act was signed into law in 2002, having been created to improve the accuracy and reliability of corporate disclosures, following a series of corporate financial scandals. Companies headquartered in the US or those dealing with US firms must comply with the regulations.
According to Martin James, director of European operations with OpenPages: “In the Irish market, strictly speaking there’s less than 20 Irish companies that need to comply with Sarbanes-Oxley and of those, only two have made decisions on which software they’re going to take.”
Some of them have evaluated possible software solutions; James claimed that CRH, one of the largest companies in the State, felt the solutions were very immature when it looked into the issue around a year ago. James pointed out that many of the US firms with experience in the field of Sarbanes-Oxley compliance weren’t in the European market until recently. In addition, non-US firms were recently granted an extension on compliance until July of next year, removing some of the urgency to make a quick decision.
Another trend James has noticed in North America is that many companies didn’t buy a software tool to help them in the first year of compliance. He suggested two reasons for this: “They wanted to see solutions mature and they wanted to do it ‘by hand’ so they could see the value of the solution, now that they understand the pain involved.”
OpenPages had initially been in the content and document management space but refocused the company three years ago to take advantage of the then-emerging corporate governance market. It now has 140 customers worldwide for its SOX Express product.
One customer, the Brewer SAB Miller, is South African and therefore not legally obliged to comply with SOX but chose to do so. “It’s doing it voluntarily as part of good corporate practice,” said James, who added the company put 10 people to work full time on this project.
Another client is Coca-Cola Europe, which has seen benefits to its business in implementing the software beyond mere compliance, said James. “It enables them to do a lot of analysis of their business processes and get their house in order.”
An additional driver in the Irish market will be the Companies Act, said James. “There’s a big opportunity for us to go after Irish companies that haven’t got SOX obligations but have to comply with the national legislation,” he said. “There are 43 different types of legislation in Europe that we can address with our solution.”
By Gordon Smith