Question

18. A nonprofit organization called the Preserve Your Hair-Itage Foundation is committed to funding medical research projects aimed at developing a vaccine for male-pattern baldness. The organization believes that its contributions over the long run will be 20% higher if it institutes a code of conduct, an antiretaliation whistleblower policy, and an audit committee comprised of well-regarded financial executives. The CEO of this organization estimates that it will have to spend 5% of its annual revenues to maintain these policies. Some members of the organization’s Board of Directors oppose spending a higher percentage of the organization’s donation revenue on overhead. a. Is this organization required to adopt these new policies under SOX? b. Should it adopt these new policies?

Answer 1

Hello

As SOX is the legal requirement which is to be followed by a organisation for the good compliances and governance

Here in the question given that their would be 20% more contribution to organisation after implementing the said requirement and have to pay 5% of the annual revenue to maintain all that.

So here the point on which is to be focused is that finally the implementing is adding to organisations profit by higher contribution and it is better in long run.

CEO Decision should prevail over other as it is beneficial to organisation

Conclusion:- Organisation should adopt to the new policies under SOX