Here's my wish list of provisions in Sarbanes-Oxley and Dodd-Frank that I'd like to see the new Republican majority in Congress repeal or fix:
1. Repeal the conflict minerals disclosure rule. It's costly, hard to administer, and ineffectual.
2. Repeal say on pay. It doesn't work. It's counter productive. It's an unjustified intrusion on director discretion.
3. Repeal the Volcker rule. It's too complex to be workable, as well as a bad idea from the get go.
4. Repeal pay ratio disclosure. It's a costly rule that was intended soly to make left0liberal Occupy Wall Street types happy.
5. Allow corporations to opt out of the shareholder proposal rule (14a-8). Doing so would provide both a check on shareholder interventions and, if widely adopted, it would also provide evidence that investors prefer such provisions.
6. Alternatively, allow corporations to opt out of the current exemption in Rule 14a-8(i)(1) for proposals that are not proper as a matter of state corporate law.
7. Also, with respect to the shareholder proposal rule, the exemption under Rule 14a-8(i)(7) for proposals relating to ordinary business expenses needs to expanded and revitalized. Under current law, the ordinary business exclusion is essentially toothless. The SEC requires companies to include proposals relating to stock option repricing, sale of genetically modified foods and tobacco products by their manufacturers, disclosure of political activities and support to political entities and candidates, executive compensation, and environmental issues. Obviously, however, these sort of ordinary business decisions are core board prerogatives. Because deference to board authority remains the default presumption, this exemption therefore needs to be expanded and revitalized.
8. Another change to the shareholder proposal rule that is needed is raising the eligibility threshold for using Rule 14a-8 to require that the proponent have held a net long position of 1 percent of the issuer’s voting stock for at least two years. In addition to decreasing the risk that the activist would be pursuing private rent seeking, by discouraging proposals from activists using an empty voting strategy, such a change will ensure that activists are long-term investors rather than short-term speculators.
9. Shorten the 10 day reporting window under Section 13(d) to no more than 2 business days. The ten day window maybe made sense back in the old days when one filed everything on paper. But in these days of electronic filing, when the SEC has accelerated filing of a host of disclosures, it makes no sense to let 5% holders have 10 days of secrecy. Especially in an era of empty voting and other shenanigans by hedge funds.
10. Litigation reform.
11. I agree with the Chamber of Commerce: "Replace the single director leadership structure at the Consumer Financial Protection Bureau (CFPB) with a bipartisan commission to ensure continuity and a balanced approach to policymaking. Restore appropriate Congressional oversight by bringing the CFPB’s budget within the formal appropriations process, similar to most independent agencies. Ensure more effective coordination with safety and soundness regulators to guarantee that CFPB regulations do not conflict with other regulations or otherwise undermine the diversity and soundness of the banking system."
12. I also agree with the Chanber that Congress should "Hold proxy advisory firms, principally Institutional Shareholder Services and Glass Lewis, to standards that move the industry towards a more accountable, transparent, and evidence-based policymaking process while eliminating core conflicts of interest."
