And Then There were Three
New York – The latest SEC commissioner to indicate that they
are leaving the Commission is Annette Nazareth. The resignation brings the number of Commissioners to three on the 5 person Board. Ms. Nazareth’s term was up in June, and while commissioners may
continue to serve for up to 18 months after their term expires, Ms. Nazareth
has informed President Bush that she is does not wish to be renominated for
another term in office. Of interest is that Annette Nazareth is set to speak at
the Securities Trading Association tomorrow, though we expect she will not
address the resignation.
Given the potential political impact of the SEC, only three of the
commissioners may be of the same party at any time. After accounting for the Nazareth
resignation, the SEC will be governed by 3 Republicans, Paul Atkins,
Christopher Cox and Kathleen Casey. Should Bush decide to replace Ms. Nazareth,
he would need to find a Democrat to serve.
What is more likely than a democratic nomination, though, is no
nomination at all, leaving the SEC under-manned, but under Republican control. This is not
without precedent. President Clinton allowed the board to dwindle down to just
two democrats during his term as President.
Christopher Cox’s tenure has been characterized as one being
ruled by calm consensus. The commission has ruled unanimously
on most issues that were taken to a vote. Under the surface, however, there
have apparently been some substantial disagreements. One such disagreement—and the
probably cause of Ms. Nazareth’s decision—is a pending decision as to whether
shareholders can nominate their own candidates for the Board of company (proxy
access).
Some feel that it is somewhat exclusive to give management
the sole right to table Board members. On the other hand, in the
world of growing shareholder concentration and activism, there is also a massive
conflict of interest in approving proxy access.
Ms. Nazareth has served on the Board of the SEC over nine
years. She did not indicate the reason for her decision.
Posted at 08:46 am by Thomas Hutchinson
Permalink
