Final answer:
The claim that HR executives must be added to company boards as a result of the Sarbanes-Oxley Act is false. The Act focuses on preventing accounting fraud and increasing financial transparency but does not mandate the addition of HR executives to the board of directors.
Step-by-step explanation:
The statement claiming that HR executives are being added to companies' boards of directors as a result of the Sarbanes-Oxley Act is false. The Sarbanes-Oxley Act, passed in 2002 in response to major accounting scandals involving corporations like Enron and WorldCom, was designed to increase transparency and accountability in corporate governance and financial reporting to protect investors from fraud.
While it mandates a range of reforms that affect corporate governance, it does not specifically require HR executives to be added to boards of directors. The composition of the board and the appointment of executives such as HR are not directly addressed by the Sarbanes-Oxley Act. Instead, it focuses on aspects like establishing a public company accounting oversight board, implementing stronger internal controls on financial reporting, and requiring CEOs and CFOs to certify the accuracy of financial statements.