Why should investors lose a voice in who runs their companies?

Posted Dec 4th 2007 6:01PM by Zac Bissonnette
Filed under: Management, Scandals

Last week, I wrote about the SEC's horrible new rule making it easier for companies to keep outside candidates for director off the ballot.

But after Gary Weiss chastised SEC Chairman Chris Cox and the media for not paying attention, I had to return to the topic. Weiss's comments are right on:

... the media has been comparatively silent over the SEC's capitulation to corporate lobbyists, such as the Business Roundtable and U.S. Chamber of Commerce ... Chris Cox, very much a "politician" as Gretchen points out, is blowing with the wind -- which is an utter indifference to investor rights in the Bush administration.

Weiss is referring to a fantastic piece in Sunday's New York Times written by Gretchen Morgenson. Referring to the disasters that have taken place at companies like E*Trade (NASDAQ: ETFC), Morgenson writes:

Certainly the losses generated over the last few months by major financial firms indicate that something is very wrong with the boards of these companies. These directors either knew of the risks their managers were taking and blessed them, did not know of them at all, or were advised of them and were unable to rein in the executives in charge.

It is a travesty that the SEC, which should be pro-investor, is taking steps to insulate boards in the wake of numerous high-profile cases demonstrating that boards need more accountability, not less.

The GOP can talk all it wants about being pro-investor and supporting tax cuts. But remember, it's the Democrats that have stood up for the rights of shareholders.

Tags: boards, Governance, SEC, Securities and Exchange Commission, SecuritiesAndExchangeCommission, shareholders