New interim NYSE chairman seeks reform - East Valley Tribune: Business

New interim NYSE chairman seeks reform

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Posted: Monday, September 29, 2003 10:00 am | Updated: 2:07 pm, Thu Oct 6, 2011.

WASHINGTON - John S. Reed, temporarily leading the embattled New York Stock Exchange, insisted on his first day in the job Monday that the exchange should be reformed before the makeup of its board is changed.

Reed, who was meeting with Securities and Exchange Commission chairman William Donaldson, denied a news report that he was expected to seek the removal of Wall Street chief executives from the board to reduce potential conflicts of interest.

Any alterations in board membership "should follow from the governance changes" in how the NYSE conducts itself, Reed told reporters before his meeting with Donaldson, who has been pushing for reforms by the exchange.

"I have given no thought to the composition of the board," Reed said. He said the news report "has zero foundation from me."

The composition of the 27-member board and its vulnerability to conflicts of interest have been frequently cited by critics of the NYSE, and some observers believe it is inevitable that several directors will step down. The board includes six chief executives from major Wall Street firms, including Merrill Lynch, J.P. Morgan Chase and Goldman Sachs.

It was Goldman Sachs chief executive officer Henry Paulson who recently floated the idea of removing those executives from the board.

Reed, a prominent banker who is the former co-CEO of Citigroup, was drafted by the NYSE board as interim chairman after Chairman Dick Grasso resigned Sept. 17 amid a public furor over his $187.5 million pay package.

Reed said Monday he wanted to move with "all deliberate speed" on the process of NYSE reform, and that proposals would be vetted by the SEC. Although an earlier set of proposals by the NYSE doesn't go far enough, Reed said, it would be "foolish" to automatically discard them without careful study.

H. Carl McCall, who resigned as lead NYSE director last Thursday, was presiding over a meeting Monday in which directors would hear public testimony and consider ways to reform the exchange. McCall has said he planned to present the recommendations to Reed.

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