September 16, 2016

Our New “Director Independence Handbook”

Spanking brand new. By popular demand, this comprehensive “Director Independence Handbook” covers the entire terrain, from determinations to handling under proxy advisor definitions. This one is a real gem – 94 pages of practical guidance – and its posted in our “Director Independence” Practice Area.

Piwowar Seeks More Disclosure From Banks In Lieu of Other Regulation

In this WSJ piece, Andrew Ackerman describes this speech by SEC Commissioner Michael Piwowar:

Policy makers at the Federal Reserve and their counterparts at the Securities and Exchange Commission have fundamentally different approaches to regulation: The Fed focuses mainly on assessing how safe banks are, the SEC primarily on what companies disclose to markets. Given the two camps don’t always see eye to eye , it’s no surprise SEC officials have often chafed over efforts by the Fed to apply its prudential approach to the capital markets, particularly for asset-management firms. Now a top SEC official, Michael Piwowar, is pushing back — and, in a twist, pressing for more SEC-like regulation of banks.

Mr. Piwowar’s argument, fleshed out in a speech this summer in London, boils down to this: After a plethora of new and costly banking regulations since the financial crisis, regulators still have done very little to remedy the dearth of public information about the banking sector. Many investors see big banks as black boxes. Public mistrust of banks remains high. The solution, according to Mr. Piwowar, is for the SEC to use its authority over publicly traded firms to pull back more of the curtain on banks’ inner workings, just as it forces the companies it oversees to inform investors about factors that could hurt profits.
“Rather than imposing prudential regulation on markets, requiring banks to comply with the disclosure-oriented focus of market-based regulation would provide better protection to the financial system,” he said.

Mr. Piwowar outlined a handful of areas ripe for improved disclosures. They include more details about the loans banks make and the securities they hold as investments, as well as results of the Fed’s big-banks stress tests and granular details of their “living wills,” or plans to go through bankruptcy without needing taxpayer money. A fifth area involves greater disclosure of “material” regulatory costs, in terms of direct expenses as well as “opportunity costs” resulting from new regulatory requirements.

Cap’n Cashbags: Nepotism Reigns

In this 45-second video, Cap’n Cashbags – a CEO – hires three sons who probably aren’t qualified:

Broc Romanek