There are two main approaches to corporate governance: rules-based and principle-based.

Rules-based corporate governance applies to the USA and principle-based corporate governance applies to the UK.

Rules-based corporate governance applies to the UK and principle-based corporate governance applies to the USA.

Sarbanes Oxley Act (SOX) is a rules-based approach to corporate governance.

Sarbanes Oxley Act (SOX) is a principle-based approach to corporate governance.

A principle-based approach will mean the entity must comply or explain and a rules-based approach will have appropriate penalties for transgression.

Best practice will use a rules-based approach to corporate governance and will have appropriate penalties for transgression.