CorporateGovernanceRuleProposalsReflectingRecommendationsfromtheNYSECorporateAccountabilityandListingStandardsCommitteeAsApprovedbytheNYSEBoardofDirectorsAugust1,2002ThefollowingistheprincipaltextoftherulefilingsubmittedbytheExchangetotheSecuritiesandExchangeCommissiononAugust16,2002.Itincludestheproposedcorporategovernancestandards,aswellastherelatedchangesmadetocertainotherExchangerules.ItalsoincludesthesummaryofthewrittencommentsreceivedbytheExchangeontheJune6,2002ReportandrecommendationsoftheCorporateAccountabilityandListingStandardsCommittee.ThissummaryofcommentsisarequiredpartoftherulefilingsubmittedtotheSEC.TherulefilingissubjecttoreviewandapprovalbytheSEC,whichincludesanadditionalpubliccommentperiod.TheNewYorkStockExchange(the“Exchange”or“NYSE”)haslongpioneeredadvancesincorporategovernance.TheNYSEhasrequiredcompaniestocomplywithlistingstandardsfornearly150years,andhasperiodicallyamendedandsupplementedthosestandardswhentheevolutionofourcapitalmarketshasdemandedenhancedgovernancestandardsordisclosure.Now,intheaftermathofthe“meltdown”ofsignificantcompaniesduetofailuresofdiligence,ethicsandcontrols,theNYSEhastheopportunity–andtheresponsibility–onceagaintoraisecorporategovernanceanddisclosurestandards.OnFebruary13,2002,SecuritiesandExchangeCommission(“SEC”)ChairmanHarveyPittaskedtheExchangetoreviewitscorporategovernancelistingstandards.Inconjunctionwiththatrequest,theNYSEappointedaCorporateAccountabilityandListingStandardsCommittee(the“Committee”)toreviewtheNYSE’scurrentlistingstandards,alongwithrecentproposalsforreform,withthegoalofenhancingtheaccountability,integrityandtransparencyoftheExchange’slistedcompanies.TheCommitteebelievedthattheExchangecouldbestfulfillthisgoalbybuildinguponthestrengthoftheNYSEanditslistedcompaniesintheareasofcorporategovernanceanddisclosure.Thisapproachrecognizesthatnewprohibitionsandmandates,whetheradoptedbytheNYSE,theSECorCongress,cannotguaranteethatdirectors,officersandemployeeswillalwaysgiveprimacytotheethicalpursuitofshareholders’bestinterests.Thesystemdependsuponthecompetenceandintegrityofcorporatedirectors,asitistheirresponsibilitytodiligentlyoverseemanagementwhileadheringtounimpeachableethicalstandards.TheExchangenowseekstostrengthenchecksandbalancesandgivediligentdirectorsbettertoolstoempowerthemandencourageexcellence.InseekingtoempowerandencouragethemanygoodandhonestpeoplethatserveNYSE-listedcompaniesandtheirshareholdersasdirectors,officersandemployees,theExchangeseekstoavoidrecommendationsthatwouldunderminetheirenergy,autonomyandresponsibility.Theproposednewcorporategovernancelistingrequirementsaredesignedtofurthertheabilityofhonestandwell-intentioneddirectors,officersandemployeestoperformtheirfunctionseffectively.Theresultingproposalswillalsoallowshareholderstomoreeasilyandefficientlymonitortheperformanceofcompaniesanddirectorsinordertoreduceinstancesoflaxandunethicalbehavior.InpreparingtherecommendationsitmadetotheNYSEBoard,theCommitteehadthebenefitofthetestimonyof17witnessesandwrittensubmissionsfrom21organizationsorinterestedindividuals.TheCommitteealsoexaminedtheexcellentgovernancepracticesthatmanyNYSE-listedcompanieshavelongfollowed.Inaddition,theCommitteereviewedextensivecommentaryrecommendingimprovementincorporategovernanceanddisclosure,statementsbythePresidentoftheUnitedStatesandmembersofhisCabinet,aswell...
