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The energy conglomerate Enron was the seventh-largest company in the U.S.

And then, poof, it collapsed.

Finance, ultimately, is about trust.

Enron’s management had frankly cooked the books, concealed problems in the business, defrauded investors, and more. Its failure wiped out more than $2 billion in retirement savings and tens of thousands of jobs. This scandal was followed by yet other multi-billion-dollar accounting frauds at WorldCom and elsewhere.

And so, in response to this crisis, 20 years ago this July, Congress enacted the Sarbanes-Oxley Act. I was honored to have a front-row seat, working with my hometown Senator Paul Sarbanes on this bill.

A central goal of Sarbanes-Oxley was, again, to restore that trust in our financial system.

First, it enhanced the quality of auditing standards, inspections, and enforcement.

Auditing standards, for instance, were set by a professional association, and the profession was writing its own rules. That’s an inherent conflict. Thus, Sarbanes-Oxley established an independently funded auditing standards-setter: the Public Company Accounting Oversight Board, under the regulatory oversight of the Securities and Exchange Commission.

It also ensured that the accounting standards themselves — the setter, the Financial Accounting Standards Board — had secure, independent funding. You see, it matters who “audits the auditors.”

Second, at Enron, their audit firm had lucrative consulting engagements with the energy company. So that’s an inherent conflict as well. Thus, Senator Sarbanes working with Congressman Mike Oxley on the other side worked to create a stronger barrier between auditors and other parts of the auditing firm’s businesses.

And then, lastly, the Enron crisis revealed problems with how companies are governed. So, Sarbanes-Oxley established requirements to help ensure that the incentives of executives, their boards, their auditors, their accountants, their audit committees are better aligned with their investors for the protection of you.

So, happy birthday, Sarbanes-Oxley. In the last 20 years, we’ve learned a lot. The quality of public company audits has improved.

Let’s not forget our core lessons.

It’s important to have robust, independent organizations setting standards, inspecting firms, and enforcing against those rules.

It’s important to separate the parts of an auditing firm from its consulting services that may have conflicts with each other.

And it’s important that companies are held accountable for their numbers.

When trust in our markets grows, and that benefits investors and issuers alike.