March 4, 2011

Should the SEC Be Reorganized? If So, How?

With a government shutdown averted – at least for two weeks – SEC Staffers still have plenty to be concerned about. One of the Dodd-Frank studies – required by Section 967 of the Act – is being prepared by an independent consultant, the Boston Consulting Group. Expected to be published soon, the study’s stated purpose is to “examine the internal operations, structure, funding, and the need for comprehensive reform of the SEC, as well as the SEC’s relationship with and the reliance on self-regulatory organizations and other entities relevant to the regulation of securities and the protection of securities investors that are under the SEC’s oversight.”

Given that this study was commissioned at a time when it was expected that the SEC would receive more funds and would be in full hiring mode – and now the opposite is true – it will be interesting to see how the study handles this dramatic change in the current Congressional-regulatory environment.

And speaking of an underfunded SEC, you should read this editorial by former SEC Commissioner Bevis Longstreth entitled “Congress and the SEC’s Starvation Diet.” Here is an excerpt:

A horse forced to carry too heavy a load collapses. So too an agency. Far better, in such circumstances, for the public not to be misled, not to be lulled into complacency by reliance on the Government, but rather to be informed that the Government should not be counted on as a source of protection — in short, to be told that one must fend for one’s self.

Study: A Disconnect in Growing Shareholder Engagement

Last week, the IRRC Institute issued a study entitled “The State of Engagement Between US Corporations and Shareholders” that was conducted by ISS and shows that engagement is increasing. As Jim McRitchie notes, the study reveals there is a bit of disconnect for shareholder engagement practices so far. And that engagement is either a priority or a non-event for investors – asset owners and asset managers were most likely to report either that they had engaged with more than ten companies in the previous year or that they had not engaged at all.

Based on what I am hearing on the street, that certainly seems to be the case as many are trying new avenues of engagement for the first time due to say-on-pay with mixed results. I’m sure we will be seeing more of these studies after the proxy season is over, reporting many of the same things…

Alan Kailer’s Latest Tables Chapter

Always popular, I have posted the latest annual update of Alan Kailer’s chapter regarding preparation of the executive compensation tables in’s “Tabular Disclosures” Practice Area.

– Broc Romanek