Tuesday, May 15, 2007

Compliance as a driver for LBO's and going private

I was at another of my favorite haunts in Manhattan last night - St. Andrews Restaurant, eating my haggis (yes, really), and wound up chatting with a guy and his wife for a couple of hours. He works for HSBC and they just moved here from London. With the news about Daimler selling to Cerebrus, I asked him about the driving factors for companies going private. One of the first things he said was - compliance costs.

In the Identity world I couldn't help but wonder if companies are questioning is it really worth what we spend since there are no definitive answers about what is right and what is not. Based on my observations from the trenches, so long as companies are working on compliance, aka have a budget and consultants helping them, then they are ok, at least with Sarbanes-Oxley. I ask - to what end?

It is like owning a boat - it's a big hole in the water you throw lots of money into. Complaince is the new QE 2 in this metaphor.

If anyone out there has any additional insight as to whether or not our discussion has any merit, please let me know. It seems some companies would rather spend the compliance dollars into running a tighter ship their way, not by loosely defined laws cooked up by legislators.



Anonymous will holt said...

I don't fully agree with the statement for a number of reasons. European financial institutions, and in particular european banks look far more attractive to US based ops if they are SOX compliant. Secondly compliance involves many factors, some of which can be utilised to reduce operational risk. This is of major financial benefit. On the other hand you will be given the argument that if the financial penalties outweigh the cost of implementation then......However I personally think this is short sighted and negligent.

Monday, June 11, 2007 1:32:00 PM  

Post a Comment

<< Home