Jim Clark is a legend in tech, having been the co-founder of Silicon Graphics(NASDAQ:SGIC). From there, he co-founded Netscape, as well as other companies like Healtheon/ Web MD Corp(NASDAQ:HLTH).

In fact, one of his dot-com investments –- Shutterfly (NASDAQ:SFLY) -– recently went public. However, Clark has decided to relinquish his role as chairman of the board.

Actually, this is not a sign he has doubts about the company's prospects; rather, it is that he has doubts about US securities regulations, especially Sarbanes-Oxley.

You can check out his resignation letter on the SEC site.

According to Clark:

As I understand it, Sarbox dictates that I not Chair any committee due to the size of my holdings, not be on the compensation committee because of the loan I once made to the company, not be on the governance committee, and it even dictates that some other board member must carry out the perfunctory duties of the Chairman. What's left is liability and constraints on stock transactions, neither of which excite me.

It seems pretty clear to me that lawmakers have gone too far in considering a large shareholder to be inappropriate in the roles, but it is equally clear that I have no ability to change this in the near term. My only solution is to become an outsider. I wish to be treated as such effective immediately.

Yes, there is talk that there may be some changes to Sarbanes-Oxley. Unfortunately, in the meantime, it will continue to be tough for public companies – especially smaller ones – to attract top-notch talent.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

George Mason University's Henry G. Manne wrote a piece in today's Wall Street Journal (subscription required) where he called for the repeal of Sarbanes-Oxley, and mocked the ideals of corporate democracy. While he presents a strong free-market case, and I am a free-market proponent myself, I think that he misses the important role that government regulators can play in making markets better for investors.

I certainly agree with him that the government should not step in and impose rules about how much executives should be paid, or silly policies like "one-shareholder one vote" as opposed to "one-share one vote" as is currently being debated in Europe. But the important role that the SEC should play in corporate governance can be summed up in one word: disclosure. While it would be American for the SEC to tell companies how many stock options they can issue employees, it is completely legitimate to require that they be expensed, as a recent rule requires.

Similarly, mutual fund investors should have a right to know how/whether their shares were voted. And if activist investors wish to launch proxy battles, the government can play a role in tearing down red tape that makes this so difficult in many cases. The government can regulate disclosure and, to some extent, the rules of the game. After that, it is up to investors