Business Roundtable Statement on “Restoring American Financial Stability Act” Discussion Draft

Category: AC RSS Feeds, AC RSS, AC Whats New, CM News, CG News, CFR News
Source: Business Wire

WASHINGTON--(BUSINESS WIRE)--“Business Roundtable supports financial services regulatory modernization that targets the specific causes of the current crisis. Unfortunately, the draft legislation released by Senator Dodd does not meet this objective and is fundamentally flawed in many areas.

“First, the corporate governance provisions represent unprecedented federal intrusion into corporate management and undermine more than 100 years of state corporate law practices. Creating additional shareholder rights without companion responsibilities may result in more risky, short-term corporate behavior – exactly the opposite of what is intended.

“Secondly, individual companies and their shareholders should choose the management model that works best for them; this has been a very successful model. Senator Dodd’s proposal would eviscerate this longstanding approach and substitute a one-size-fits-all federal mandate. Furthermore, the thoughtful approach taken in the provision requiring companies to disclose the basis for either combining or separating board leadership should be adopted elsewhere in the bill.

“We look forward to continuing to work with the Senate Banking Committee on balanced reform legislation that remedies financial issues without stifling economic growth or unduly burdening businesses seeking to create jobs,” said John J. Castellani, President of Business Roundtable.

Business Roundtable is an association of chief executive officers of leading U.S. companies with nearly $6 trillion in annual revenues and more than 12 million employees. Member companies comprise nearly a third of the total value of the U.S. stock markets and pay more than 60 percent of all corporate income taxes paid to the federal government. Annually, they return more than $167 billion in dividends to shareholders and the economy.

Business Roundtable companies give more than $7 billion a year in combined charitable contributions, representing nearly 60 percent of total corporate giving. They are technology innovation leaders, with more than $111 billion in annual research and development spending – nearly half of all total private R&D spending in the U.S.

94 times viewed

---