This week, Sarbanes-Oxley was in the news as the Supreme Court examined a lawsuit involving the act and eventually struck down a small part related to the Public Company Accounting Oversight Board. However, the entire act is still “fully operative as a law.”
Within the PR industry, critics of the law, which was originally drafted with the aim of increasing corporate transparency in the wake of Enron and WorldCom, note that SOX simply encourages companies to hide behind it.
For example, publicly traded holding companies in the advertising and PR industry refer to SOX when declining to report exact revenue numbers for individual firms. As PRWeek's annual Agency Business Report shows, while independent firms such as Edelman and Waggener Edstrom report their revenue numbers, it is difficult to compare how they stack up to other agencies, and how those holding company-owned firms stack up to each other.
Increased access to these numbers would more accurately portray the industry, and in the best-case scenario, show how PR is moving in on advertising for dollars, particularly in the digital space.
And yes, everyone loves a good rumor mill and discussing which agencies aren't doing well, but more transparency with revenue figures would bring that to rest. Then the industry can start talking about other issues, such as diversity and staking its claim within digital and social media.
Reporting exact numbers is not always flattering, and in the 2010 Agency Business Report, there were plenty of drops in revenue compared to past years. But providing accurate figures quarter after quarter, year after year, is the best way to keep the industry accountable and track the progress that is being made.
As SOX got media coverage this week, its critics hoped the Supreme Court decision would change some of the issues that have surfaced since the law was enacted in 2002. Without those changes, the PR industry will never be fully transparent, nor will it be fully understood.