The Council of Institutional Investors lauded a financial regulatory reform proposal by Sen. Chris Dodd, D-Conn., and urged Congress to prevent excessive risk on Wall Street.
The bill by Mr. Dodd, chairman of the Banking, Housing and Urban Affairs Committee, would, among other things, require directors of public companies to be elected by a majority of votes cast by shareholders and reaffirm the SEC’s authority to issue proxy access rules allowing investors to nominate director-candidates for corporate boards.
“Reform should not be what’s in Wall Street’s best interest; what matters most is the best interest of the investors,” CII Executive Director Ann Yerger said in a teleconference today.
Former SEC Chairman Richard Breeden said improved corporate governance is good for business, investors and taxpayers, noting that many boards did not control excessive risk taking. Mr. Breeden spoke at the teleconference, which was sponsored by the CII.
“A common theme among firms that failed is boards that sat back (and failed to take action) before it was too late,” he said.
The organization also aimed to send a strong message to regulators to rein in the “wild frontiers” of the capital markets.
Anne Sheehan, director of corporate governance at the $132.6 billion California State Teachers’ Retirement System, West Sacramento, said regulators should put derivatives on regulated exchanges and coordinate with international markets. “Our approach must be global,” she said.