Today’s proposed reforms are overdue, but they’re also a decent start at cleaning up the New York Stock Exchange‘s governance act. Among the recommendations, that NYSE officers can no longer serve as board members for listed companies.
While that might seem obvious, until recently it wasn’t the case. For example, Dick Grasso, the chair of the NYSE was on the board of Home Depot, among other companies. How is it, precisely, that the NYSE regulated listed companies while simultaneously having officers serve as consummate insiders?
The other recommendations are more cosmetic. For instance, salaries will now be published, so we’ll know when Chairman Grasso’s salary varies from its current $10mm level. And while it is nice to see that non-securites reps must make up the bulk of posts in crucial NYSE board committees, the NYSE still hasn’t done a very good job of specifying what constitutes an appropriate board member. After all, former Clinton White House Chief of Staff Leon Panetta still serves there. Lord knows what his pedigree is for the position, having spent his career in and around politics.