Surviving The System

In his role as CEO of PricewaterhouseCoopers, Sam DiPiazza is in a position to check the pulse of corporate America, hearing firsthand from other executives what they think of the effects of Sarbanes-Oxley on the business world. Lately he has been hearing quite a bit of griping. DiPiazza recently talked with TIME's Dorinda Elliott about his concerns. Excerpts:

TIME: Has corporate reform gone too far?

SAM DIPIAZZA: Most people think the changes overall have been good. The system needed change. To demand that CEOs should declare that their financial controls work--how can you argue with that? But in some cases, boards are getting distracted by the rules of compliance instead of the objectives, and that can't be right. I think the pendulum is swinging back.

TIME: Could the U.S. lose its competitive advantage because of an overobsession with rules?

DIPIAZZA: There is some concern that if Europe is less proscriptive in its approach, there will be a competitive advantage. But nobody thinks having independent auditing companies is not a good thing or that having CEOs certify their financial results is unreasonable or that having boards be independent is unreasonable.

TIME: But do you hear griping about reforms?

DIPIAZZA: Yes, all the time. It's about the level of cost for some processes and the sense of boards themselves that [for] the liability they are being held to, the risk is exceeding the reward, whether it's intellectual or financial. It's out of balance. Who's going to want to be on a board?

TIME: What are the biggest problems for business?

DIPIAZZA: The litigation environment needs to be addressed. That's one factor that could cause people or companies to be uncompetitive. It forces people to not take risks. If every time there's a problem, companies get sued, then who will be willing to be directors?

TIME: So, what's good about the changes?

DIPIAZZA: Boards' awareness of their obligations and management's understanding of what they are held in obligation for, the crispness with which we know who we work for and the independent oversight--that's all been good. And money is still flowing into America. Capital finds the place with the highest efficiency and security.