There are plenty of complaints these days about how tough it is to be a business executive. A congressional committee heard an earful about American problems, reports the Washington Post.
New York Stock Exchange Chairman Marshall Carter told the House Capital Markets Subcommittee many new global stock listings are going to foreign exchanges because of litigiousness, costly regulations and accounting complexity. One Democrat replied that many of the foreign listings were either government enterprises that were being privatized in their home countries or resulted from the growth in foreign capital markets - in other words, listings we were never going to get.
Carter's complaint is part of a campaign to roll back the post-Enron reforms in corporate governance. We've already seen the report suggesting that small caps shouldn't be subject to the SOX requirements because they are too onerous.
And then Goldman Sach's head of investment banking tells the London Times that all the regulation is pushing M&A activity, especially public-to-private deals. But he's talking about a raft of opportunities in energy markets in Russia, China and India, as well as Western Europe - just the same places that Carter thinks is getting all that IPO action.
Regulation is like taxes - nobody likes it but mostly it's a necessary evil. If men were angels, maybe then we could dispense with laws. And remember it's our rule of law that we always tout when we say other countries should adopt best American business practices.
And if that weren't bad enough, the New York Times reports that directors are facing organized and articulate opposition from shareholders. The big issues, of course, are executive pay and electing directors. The shareholders at Bank of America have voted to elect the directors, reports Reuters despite opposition from the directors themselves.
And it is not the cranks who are driving this shareholder activism. It is the professionals, mainly pension funds and money managers, who think that corporate governance is failing to protect shareholders' interests. But it's never easy and often stockholders have to settle for withholding their proxy. As one proxy expert tells the paper: "Companies have a lot of advantages in fending off unhappy shareholders, not the least of which is they can spend shareholder money on a professional, coordinated response. Even in the normal course, then, dissidents face an uphill battle in attempting to convince their fellow shareholders to oppose management or directors."
