U.S. Securities and Exchange Commission Chairman Mary Schapiro said her chief regret in three years running the agency was the failure to beat a court challenge of a rule letting shareholders put their own board candidates on corporate ballots.
“I would love to have found a way to structure that rule and its cost-benefit analysis in such a way that it could have withstood the court challenge that was brought against it,” Schapiro said today in an interview with former SEC Chairman Arthur Levitt to air on Bloomberg Radio. “I still believe that it could be an incredibly important tool for shareholders to hold boards accountable for the conduct of companies.”
The so-called proxy access rule, which cost the agency $2.5 million to write and defend, was rejected in a July 22 ruling by the U.S. Court of Appeals in Washington. The court cited an SEC failure to fully study the rule’s cost to companies -- inspiring a “redoubling” of agency efforts to study cost-benefit effects of its new rules, Meredith Cross, chief of the SEC’s Division of Corporation Finance, said in November.
Schapiro said another major agency effort -- potentially blending U.S. accounting practices with a unifying system of International Financial Reporting Standards -- will be decided “in the next few months.”
“There are some hurdles that have to be passed before we’re going to be comfortable making the ultimate decision about whether to incorporate IFRS into the U.S. reporting regime,” she said. Sticking points include the independence of the International Accounting Standards Board and “the quality and enforceability of standards,” she said.
As the coming presidential election decides whether President Barack Obama retains the White House, she said she hasn’t considered what she would do if he asked her to stay in her job. “I would always listen, but I’m definitely not thinking that far ahead,” she said, equating the SEC chairmanship with “being in the middle of a hurricane.”
Levitt, who ran the SEC from 1993 to 2001, is a member of the board of Bloomberg LP, the parent of Bloomberg News.