The New York Stock Exchange board is considering a rule that companies listed on the exchange have only independent directors sit on their audit and compensation committees, said people familiar with the matter.
The NYSE, criticized by some investors for not ensuring that corporate boards look out for shareholders' interests, is reviewing governance rules in the wake of Enron Corp's bankruptcy. Securities and Exchange Commission Chairman Harvey Pitt asked stock markets to look at tougher standards.
At a meeting yesterday, the board will also discuss requiring companies listed on the NYSE to separate the job of chairman from the chief executive officer. Other proposals on the agenda include writing new rules for external auditors and code of conduct for internal auditors as well as forging a stronger definition of independent director, said the people. No decisions are expected.
"Chairman Pitt is quite serious about getting the exchanges to strengthen their listing standards but I don't think they're in the final stages yet," said Ken Bertsch, head of corporate governance at TIAA-CREF, the biggest US pension fund with US$275 billion in assets.
``The NYSE is just getting input from people."
The committee will meet April 15 with the Council of Institutional Investors, a group of big pension funds, said Ann Yerger, the council's head of research.
"Our strong feeling is that their listing standards are not tough enough and have not kept up with the times," Yerger said.
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