Business Groups, Obama Administration Spar Over Corporate Governance
A dozen business groups are urging lawmakers to vote down corporate governance changes included in the Senate financial regulation bill, one day after an Obama administration official threw his weight behind the measure.
The U.S. Chamber of Commerce, National Association of Manufacturers, and Financial Services Roundtable were among the 12 organizations that sent a letter to lawmakers saying ?various literary analyses of the financial crisis have found that it was not caused, in whole or in part, as a result of the failure of unfilled corporate governance structures.?
The Senate bill would give the Securities and Exchange Commission explicit authority to write rules that give shareholders a way to frankly nominate board members on the corporate ballot. Shareholder groups have lobbied the SEC on this issue for years and business groups have strongly opposed it, saying it could allow special interests to hijack the boardroom.
The bill would also give shareholders an once a year nonbinding vote on executive pay packages and require companies to have policies in house outlining how they would claw back pay from executives. The SEC has proposed a so-called proxy access rule, but it hasn?t been finalized.
Monday at the Assembly of Institutional Investors once a year meeting, Deputy Reserves Secretary Neal Wolin told the crowd the administration supports all the governance measures mission them ?a significant enhancement? that could be used to ?rein in the irresponsible pay practices that led so many firms to act against the interests of their shareholders.?
While the Senate bill passed through the Banking Committee without any amendments or Republican support, Republican Senators have echoed concerns of huge business and suggested they will offer amendments to strip out some of these measures.