Why expanding Sarbox doesn't make sense

I'm a little bit late to the game, here, but let me point you to the latest piece from Thomas Palley, entitled "Expand Sarbox, Not Shrink It". The idea is that US shareholders need more protection, not less, and Palley has no fewer than eight reforms which he thinks should be mandated by the US government, including

Require that the CEO and Chairman of the Board be different persons.
Stop share buy-backs.
Make it obligatory for management to hold vested options for a period of three years.

Etc., etc. Talk about a recipe for decimating the public markets altogether. Hasn't Palley stopped to wonder what it is that's driving the private-equity industry? No one in the world would love these reforms more than Steve Schwartzman and his like. Corporate governance is all well and good. But just because something is desirable doesn't mean it should be mandated. If shareholders don't really care about these things (as reflected by the share price), then why should the government start getting all paternalistic and protective of them? Let them take the risks, say I.

Posted by Felix at 17:09 EST