by Gary Larkin for The Conference Board – Governance Center Blog, March 31st, 2011.
After listening to SEC Commissioner Luis A. Aguilar speak during Wednesday’s open meeting where the commission in a 5-0 vote approved proposed rules for exchange listing standards related to compensation committees and compensation consultants as well as new disclosures, I was left wondering whether or not such rules will be effective.
I’m not saying the issue of independence and conflicts of interest regarding compensation committees and consultants should not be addressed by various exchanges (i.e. NYSE EuroNext, Nasdaq OMX). In fact, I’m wondering why the SEC didn’t follow the audit committee model in the Sarbanes-Oxley Act. Title III of SOX (Corporate Responsibility) made it mandatory for public companies to have audit committees while the SEC’s proposed Rule 10C-1 under the Dodd-Frank Act doesn’t go that far with compensation committees. (continue reading… )