Board governance is entering a new phase as the governmental regulations inspired by the Sarbanes-Oxley Act ("SOX") are under consideration to be extended to private corporations as well as non-profit corporations. Bills are being introduced in many states to apply the same stringent requirements to private companies and non-profits, even as some formerly public companies have "gone private" to avoid the huge dollar and staff costs to comply with the multitude of requirements. A recent survey by the American Institute of Certified Public Accountants (AICPA) indicated that the average cost for a public company (mostly small-caps) to comply with SOX in 2003 was $480,000, which would wipe out a significant portion of profits of most small public companies and certainly many non-profit corporations.

Of course, the costs to comply with SOX for larger corporations have been much higher that that (in the millions of dollars), and just to comply with the new Section 404 (internal controls) regulations is costing small-cap companies an average of $740,000 (Financial Executives International survey). This is placing an enormous strain on the budgets and staff resources of such companies, at a time when many are just recovering from the ravages of 9-11 and its aftermath. Compliance with SOX is distracting management and requiring far more board and committee time, just two of the emerging downsides of these new well-intentioned but perhaps over-reaching regulations.

Among the resources boards are seeking are tools to orient or train new directors on their role and responsibilities, on-site, customized training programs or seminars that fulfill the new director education requirements, software programs to search for practical solutions to their major challenges or answers to their emerging questions, and Internet forums where they can share practices that work well and what hasn't worked well in board governance. Most directors, however, do not have a great deal of time to devote in these ways, so the resources they seek must be reasonable in cost, concise and targeted to their specific need, and easily read in an evening or on a plane flight. That is exactly what Atwater Publishing Company promises to deliver to both for-profit and non-profit directors.

Lorin Letendre
Publisher