The Sarbanes-Oxley Act requires public companies to have board audit committees comprising only independent directors.

Sarbanes-Oxley Act

A U.S. law enacted in 2002 to protect investors by improving the accuracy and reliability of corporate disclosures.

Independent Directors

Board members who do not have a material or pecuniary relationship with the company or its related parties, except for board compensation, ensuring unbiased and objective decisions.

Audit Committees

A subgroup of a company's board of directors responsible for overseeing financial reporting and disclosure.