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News and Press Releases |
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HEADLINE:
NYSE Governance Proposals Still In Limbo
By: Nicole Maestri - Reuters
Forbes.com. May 14, 2003
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EXCERPT: Last June, in a blaze of publicity, the New York Stock Exchange unveiled its ambitious set of proposals for corporate governance reform. Nearly a year later, the proposals -- aimed at cracking down on wayward chief executives and restoring investors' confidence -- are still under review by the Securities and Exchange Commission. Corporate scandals have not disappeared and investors' confidence is as low as ever. "I wish that the SEC would hurry up," said David J. Nygren, partner and head of the corporate governance practice at Mercer Delta Consulting. "They're really hurting their own mission by suspending action on it." The day the NYSE released the proposed rule changes, the broad stock market hit an 8-month low, hurt by a crisis of confidence in corporate America, as details of Dennis Kozlowski's dealings at Tyco International Ltd. (nyse: TYC - news - people) became public. In the past year, the market has slid even further. The issue of corporate governance has taken on extra meaning for the NYSE lately, as it has come under attack for NYSE Chairman Richard Grasso's high pay and its nomination of Citigroup Inc.'s (nyse: C - news - people) Sanford Weill to the board. The NYSE, and the Nasdaq Stock Market Inc. , are on deadline to submit reports to the SEC by Thursday reviewing their own corporate governance practices. SLOW GOING -- Last year, then SEC Chairman Harvey Pitt asked the NYSE and Nasdaq to overhaul their rules on governance for listed companies. The NYSE was the first to release its proposals, which were largely seen as a thoughtful and comprehensive set of guidelines. The proposals, forwarded to the SEC last August and updated since then, aim to increase board independence and give shareholders a louder voice in approving the use of stock options. But approval from the SEC has been delayed by a change in leadership at the SEC following Pitt's resignation; corporate governance legislation enacted last summer that ordered the SEC to adopt dozens of rules meant to stem corporate and accounting abuses and efforts to align the NYSE proposals with Nasdaq's proposals. "One year ... is not a lot of time in the regulatory environment," said Lance Jon Kimmel, a partner with the law firm Foley & Lardner. "However, if you are an investor or an employee of a company that abused your trust and confidence, one week, one month is too much time."
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