Corporate governance - Vigil

Corporate governance experts pay considerable attention to issues involving the board of directors. Because of the scope of the board’s role and the vast responsibilities that come with directorship, companies are expected to adhere to common best practices in board structure, composition, and procedures. Our paper, Seven Myths of Boards of Directors, which was recently made publicly available on SSRN, reviews seven commonly accepted beliefs about boards of directors that are not substantiated by empirical evidence.

I want to extend a warm welcome to the members of the Equity Market Structure Advisory Committee (“Committee”). I appreciate the work that you do and, in turn, how this work informs the Commission’s efforts to fulfill its mission. I also want to welcome everyone in the audience, whether participating in person or via the internet.

Rarely do companies pursue representatives from activist funds as board candidates, much less prepare for their arrival. Yet, increasingly activist shareholders are reaching the boardroom by winning proxy challenges or obtaining settlements that allow them to designate one or more board directors.

Small businesses are vital to our nation’s economic growth and well-being. In fact, our nation’s small business owners create almost two out of every three new jobs and employ more than half of the U.S. workforce. It is therefore important to provide opportunities for entrepreneurs and investors to come together and put capital to productive uses through the development of new ideas, products, and services that make America stronger and create new jobs that bring financial security.

The discussions at our inaugural meeting underscored for me how invaluable this Committee’s insights are as the Commission continues its efforts to ensure that the equity markets optimally meet the needs of investors—both large and small—and issuers of all sizes. With the careful consideration, input, and approval of each of the Commissioners, we have been able to assemble a diverse group of widely respected experts to effectively represent the views of key stakeholders in the equity markets. And I thank each of you again for your service.