June 18, 2010

House-Senate Reconciliation: Proxy Access Goes Down the Rabbit Hole

As the House-Senate negotiations continue to heat up, they have gone off their proposed schedule and yesterday mainly was devoted to regulation of financial institutions (as noted in this NY Times article) as the Fed’s role in bank audits grew. So there was not much new news in the governance space yesterday.

However, there was growing anger among advocates of a strong proxy access provision as it became clearer that the White House is playing a much larger role in the conferee negotiations than was imagined. As noted in this Huffington Post blog, Valerie Jarrett, a senior White House adviser – who is the administration liaison to the Business Roundtable – has been pulling a lot of strings behind the scenes and appears to be primarily responsible for the new proxy access restrictions requested by the Senate conferees (as I blogged about yesterday – with yesterday’s developments provided in this ISS blog). So the CII and others have ramped up their lobbying to include Ms. Jarrett, as Jim McRitchie notes in his blog.

I just find it curious that Congress has made this big deal about televising all of its negotiations – and promising not to cut deals in the bathroom – and then we find out that the White House is a major player and is off camera. You mean I’ve been watching C-SPAN and trying to ascertain the meaning of that furtive glance for no reason?

The Big Breakup: UK to Split FSA Into Three Agencies

On Wednesday, as noted in this article, the United Kingdom’s new government unveiled a shake-up of the country’s bank-regulatory system that will consolidate power within the Bank of England.
The Financial Services Authority – which currently is the primary supervisor of the U.K.’s banking and finance industry – will be splintered into three new agencies over the next two years.

Under the plan, the Bank of England will establish a new subsidiary dedicated to regulation, as well as a financial policy committee and an agency for consumer protection and the markets. The FSA’s chief executive will assume new roles on the planned agencies, becoming a deputy governor of the central bank. The plan won’t change how the UK banks are regulated as the European Union assumes a larger role,

Europe Commission’s “Green Paper”: More Governance Proposals for Financial Firms

A few weeks ago, the European Commission issued this “green paper” (scroll to 2nd page to see it) to propose new governance reforms that would include possible new duties for directors (including a look at the duties between boards and shareholders), executive compensation, enhanced risk reporting, the composition of boards generally, more authority for independent auditors, corporate social responsibility and other matters. In addition, the financial firms are having their corporate governance policies individually reviewed by the EC.

– Broc Romanek