2.6.2.3 The United States of America

To prevent new accountancy scandals the US introduced voluminous federal legislation in 2002: the Sarbanes-Oxley Act of 2002 (SOX).1 SOX has been the most far-reaching amendment to American securities laws since the introduction of securities regulations in the 1930s.2 In principle SOX applies to every company listed in the US, including forty large Dutch companies. SOX primarily aims to improve the reliability of financial reporting. Apart from provisions to promote good corporate governance SOX contains provisions pursuant to which board members can more easily be held responsible for untrue or incomplete financial statements and for the internal conduct of a business. If a board member wilfully acts contrary to SOX provisions, he risks a long term of imprisonment. Such provisions may also have consequences for the supply of information on corporate governance or CSR in the annual reports of Dutch companies listed on an American Stock Exchange. If they were purposely to provide such untrue or misleading information, directors and supervisory board members would run the risk of being prosecuted in the US. Furthermore, SOX provides for stricter supervision by external auditors.3 Following SOX, the New York Stock Exchange and the NASDAQ introduced new corporate governance listing standards in 20 03.4 These dictate, inter alia, that companies listed on these stock exchanges adopt and disclose acodeof business conduct and ethics for directors, officers and employees' and that listed foreign companies disclose any significant ways in which their corporate governance practices differ from those followed by American companies.5