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
- 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.