Correspondence: , Financial Leadership Corporation, 1292 Quandt Ct. Lafayette, CA 94549, USA. Tel:+1 925 286 4164; E-mail: GregZ@FinancialLeadership.com

¹practiced as a Certified Public Accountant with Deloitte & Touche and served as the Chief Financial Officer of an international medical equipment company prior to founding Financial Leadership Corporation. He has developed a cable television programme in conjunction with the Small Business Administration, taught business courses at universities in Michigan and California, and has served as a trustee/director on numerous civic and charitable organisations. As a member of the XBRL (Extensible Business Reporting Language) Consortium of the United States, he supports methods to improve corporate financial and compliance reporting. Greg has educational concentrations in social science (BS), accounting (MBA) and ethics (MA), and has spoken at various business symposia on topics such as 'Building and Insuring Corporate Viability' and 'Sustainable Compliance after Sarbanes–Oxley'.

Received 14 December 2006; Revised 14 December 2006.

Abstract

The passage of the Sarbanes–Oxley Act of 2002 in the United States has strengthened corporate governance, albeit at a relatively high cost. This legislation was in response to the collapse of Enron and other high-profile corporations. These catastrophic events brought to light the failures of self-governance in the accounting and investment communities. Sarbanes–Oxley was a political initiative driven by societal demands for reform. As large corporations attempted to comply with the legislation, an opportunity was created for small and medium-sized staffing and consulting companies. Such small and medium-sized enterprises (SMEs) were an invaluable resource to corporations attempting to react quickly and effectively to the new legislation. The success of SMEs in this set of events can serve as a template for the future linking of social–political initiatives, SME resources, and corporate sustainability strategies. The specific conclusions include:

• Government legislation can strengthen corporate governance and sustainability.
• SMEs (such as staffing/consulting enterprises) play an invaluable role in the sustainability of large corporations.
• With their creativity and ability to adapt quickly to market changes, SMEs are a necessary component of Sustainability Frameworks for regional and national economic development.