Corporate Governance

Regime Change and the SEC's Corporate Governance Agenda: A Prologue

By J. Robert Brown

The President Elect has announced his choice for chairman of the SEC, Mary Schapiro.  The choice seems to suggest that President Obama had structural reform high on his list.  After all, Schapiro is a former acting chairman of the SEC and former chairman of the CFTC, indicating that she is particularly well positioned to engineer a merger of the two agencies. 

But doubts have arisen about Schapiro's commitment to the pro-investor, pro-shareholder agenda of the SEC.  FINRA, the agency Schapiro heads, is an industry controlled association not known for its aggressive enforcement of the securities laws.   To allay these concerns, Schapiro will need to quickly demonstrate that the shareholder/investor agenda, something long on hold at the SEC, will likewise get top priority. Particularly with the support of the other two Democrats on the Commission (Aguilar and Walters), Schapiro will have a working majority in favor of reform.  This should make it possible for the Agency to take quick regulatory action in a number of overdue areas.

We have developed a top ten list of the most important shareholder protection matters that require immediate attention from the new chairman.  These are the issues that will demonstrate whether Schapiro is committed to the shareholder/investor protection agenda of the Commission.  Some progress on these items in the first 100 days will demonstrate that she is.

We will set out each agenda item in the 6:15 am post for the next two weeks.  Recommendation #10 is below. 

Full post as published by The Race to the Bottom on December 29, 2008 (boomark / email).