At our 2004 SuperConference, the number one thing on attendees' minds was SOX. What a difference a year makes.

At our 2005 conference in June, GCs seemed much less concerned with governance and compliance issues. One GC told me he couldn't stomach reading another story about SOX. He was, as were other attendees, much more concerned with more mundane issues, such as learning to run his department more efficiently and better manage outside counsel.

It seems executives believe they have learned their lessons about the dangers of turning a blind eye to compliance and governance standards. And the stats seem to support their claim. The SEC recently announced that enforcement actions had plummeted 14.7 percent so far this fiscal year. And it's not because the SEC has changed its enforcement tactics. It's because companies have cleaned up their acts.

The Bush administration also has gotten the message. Bush hopes to replace William Donaldson with Christopher Cox, who, if confirmed, will most likely loosen the noose from around the neck of corporate America. Furthermore, business groups have finally gotten the courage to send Spitzer a clear message to stand down. A group of banks recently filed suit against the New York AG, challenging his authority to regulate lending.

This doesn't mean companies are putting compliance and governance on the back burner. After all, although Scrushy dodged the bullet, Kozlowski and Ebbers got hit squarely between the eyes. No CEO wants to follow in their footsteps. What it does mean, though, is that the pendulum is swinging back toward the middle, where shareholders and regulators understand that companies need to take risks in order to stay competitive and profitable.

At our 2004 SuperConference, the number one thing on attendees' minds was SOX. What a difference a year makes.

At our 2005 conference in June, GCs seemed much less concerned with governance and compliance issues. One GC told me he couldn't stomach reading another story about SOX. He was, as were other attendees, much more concerned with more mundane issues, such as learning to run his department more efficiently and better manage outside counsel.

It seems executives believe they have learned their lessons about the dangers of turning a blind eye to compliance and governance standards. And the stats seem to support their claim. The SEC recently announced that enforcement actions had plummeted 14.7 percent so far this fiscal year. And it's not because the SEC has changed its enforcement tactics. It's because companies have cleaned up their acts.

The Bush administration also has gotten the message. Bush hopes to replace William Donaldson with Christopher Cox, who, if confirmed, will most likely loosen the noose from around the neck of corporate America. Furthermore, business groups have finally gotten the courage to send Spitzer a clear message to stand down. A group of banks recently filed suit against the New York AG, challenging his authority to regulate lending.

This doesn't mean companies are putting compliance and governance on the back burner. After all, although Scrushy dodged the bullet, Kozlowski and Ebbers got hit squarely between the eyes. No CEO wants to follow in their footsteps. What it does mean, though, is that the pendulum is swinging back toward the middle, where shareholders and regulators understand that companies need to take risks in order to stay competitive and profitable.