SENATE BILL: Corporate Governance Reform Act (Law'd)

[tpfkaw]

If the honorable sponsor presented a bill containing merely sections 1 and 2, I would certainly support it, but seeing how this is one of those types of "reform" that involve overturning certain statist restrictions while introducing new ones, it's significantly more ambiguous.  I sense that if or when this bill is passed and signed, the restrictions in sections 3 and 4 will remain, but the "salary cap" will be brought back and most of the judges appointed to the Court of Chancery will have a deep anti-business animus.

I also believe the honorable sponsor lacks understanding with regards to price signals in a free market.  If a publicly-traded company is known to lack transparency to shareholders, or to heavily dilute its shares for the purpose of executive compensation, then that will deter investors from investing in the first place, or cause them to sell if they suddenly begin such practices.  Bad business practices do not need to be banned because the free marketplace of investors punishes them already.  The most sophisticated frauds, the ones that dupe investors out of billions, are ones in which everything appears to be in perfect order without much (on the surface) smell of fishiness about them at all.  When a whiff of fishiness is detected; as in the case of Enron or Madoff, the whole thing comes crashing down with astonishing rapidity and well before the regulators have even arrested the responsible parties.