New York (Nov. 7, 2003) -- The head of the California Public Employees' Retirement System Board of Administration has called New York Stock Exchange interim chairman John S. Reed’s proposal for governance changes at the Big Board inadequate.

Sean Harrigan of CalPERS, criticized Reed’s proposal as lacking strong investor representation on the board. "Investors were expecting a home run proposal to reform the New York Stock Exchange. What we got, I believe, is not even a base hit," Harrigan said in a statement. "Investors' confidence will not be restored by a plan that merely reorganizes — rather than truly reforms — this organization."

Earlier this week, Reed proposed a series of radical changes in how the NYSE is governed and named candidates for a reconstituted board of directors that would be independent from management, members and listed companies.

Reed's proposal would establish an independent board of directors with full fiduciary responsibility who would supervise regulation, governance, compensation and internal controls. The board would appoint a board of constituent representatives who will meet regularly and discuss operations, membership issues, listed-company issues and public issues relating to market structure and performance.

The board would appoint a chief regulatory officer who would report to the board's Regulatory Oversight Committee, not the exchange's chief executive.

Among those Reed proposed as candidates for election to the reconstituted board were former secretary of state Madeleine K. Albright; TIAA-CREF chief executive Herbert M. Allison Jr.; Euan D. Baird; Marshall N. Carter; Shirley Ann Jackson; James S. McDonald; Robert B. Shapiro; and Sir Dennis Weatherstone. If elected, they will serve until June 2004, when the entire board would stand for election.

Harrigan said approximately one-third of the seats on Reed's proposed "main board" should be investors. Otherwise, he said investors wouldn't have a voice on the vital Audit, Compensation, and Nominating committees.

Earlier this week, the Securities and Exchange Commission approved new NYSE standards requiring that boards of NYSE-listed companies have a majority of independent directors, that nomination and compensation committees consist solely of independent directors, and tightening the definition of director independence. A summary of the NYSE rules is available at

-- WebCPA staff

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