While calling Arthur Levitt's tenure as chairman of the Securities & Exchange Commission ineffective would be an understatement, he could, and still can, be relied upon to say the right thing. Now that the SEC finally has the quorum necessary to take action on a variety of issues, they should take Levitt's advice about proxy access changes.
Earlier this year the SEC made it impossible for shareholders to change the way directors are elected -- one of the most anti-investor events in recent history -- and it's time for that to change. Levitt writes in The Wall Street Journal that "While not a panacea, giving shareholders a bigger voice in the companies they own would go a long way in helping to restore trust."
Exactly. Some critics of strong corporate governance say that the SEC shouldn't meddle in these affairs. I basically agree: but the problem is that the SEC has meddled, making it impossible for shareholders to take control of their own companies when necessary.
On his new blog, Carl Icahn says: "It is the rules established by the government, like aspects of state corporate laws and related court decisions, that have skewed the election process in favor of management and allowed them to entrench themselves."
If Arthur Levitt and Carl Icahn agree on a change in governance laws, it's pretty much a given that it's in the best interests of investors. Current chairman Chris Cox should be called before Congress to explain why he's using his role as a protector of investor interests to serve the interests of incompetent directors at underperforming companies.
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Reader Comments (Page 1 of 1)
7-02-2008 @ 2:24PM
speculator said...
I read levitt book. I recommend it. I think he is truthful and not another spin guy.
www.theinvestingspeculator.com
7-02-2008 @ 4:03PM
winslow said...
Never thought I'd say this, but we need a complete revamping of regulations.
7-02-2008 @ 9:14PM
gerald vaughn said...
The sheer power, money, and political connections make it impossible to change the corupt ways Wall Street companies and investors alike do business. The biggest abuser is the banking sector. Getting them to change course is like trying to get the capt of the Titanic to slow down for the iceberg in his path, it is just not going to happen! Until we let 25% of the banks and investment firms tank there will be no change. We need to keep the fed out of the rescue business and let the market take its course. Saving these poorly managed and risky investment portfolios only send the message that change is not needed and the worst extreme is the fed will rescue them.
7-05-2008 @ 8:12PM
James McRitchie said...
I'd rathr see the SEC wait until next year when we have a new chairman. If they do move forward, I hope this time they won't make disclosures for proposing proxy access higher than for running a proxy fight, like they did last time. Additionally, don't cut small individual shareowners out of the process. Many of the companies that have corporate governance problems are small, without large institutional investors. Most other countries allow 100 shareowners to place nominees on the proxy. The SEC's proposal should provide for such an option as an alternative to 3% ownership threshold.