At a time when global stock exchanges are relinquishing their role as regulators to focus on trading technology, NYSE Euronext is bucking the trend. In an press announcement on Tuesday, September 1st, NYSE said that leading US lawyer, Larry Sonsini, will chair an independent advisory commission charged with examining U.S. corporate governance and the proxy process with an eye to improving best practices.
Commenting on the launch of the Commission, Duncan Niederauer, CEO, NYSE Euronext said: “As an institution, we are uniquely positioned to bring together leading experts on important issues in order to create a constructive dialog in the financial community regarding corporate governance that will benefit issuers, investors and the overall market. The creation of this advisory commission is consistent with our mission to serve the investing public. We look forward to working with the advisory commission to achieve a better and more efficient governance and proxy process.”
The Commission says that it plans to work with policymakers and others on “comprehensive corporate governance and proxy reform.” The membership of the Commission has yet to be announced but is to include “various corporate governance experts”, with a view to canvassing input from public companies, shareholders and institutional and individual investors. In its announcement the NYSE stressed the independence of the Commission saying: “As an independent body, the views of the advisory commission will not necessarily represent the views of NYSE Euronext or its exchanges.”
How the NYSE Commission will work with the SEC, or be pro-shareholder, remains to be seen. While it might be said that “many hands make light work” the involvement of another trade lobby in the reform of the US proxy system could create more confusion than clarity. Three years ago, when Sonsini chaired the Proxy Working Group to review the rules regarding director appointments his proposals met with stiff resistance. Although the committee recommended that director elections should no longer be considered routine items which the broker could vote on behalf of shareholders in Street Name accounts, the proposed amendment was postponed and then revised following vocal opposition from corporations.