Industry leaders lobby for ‘common sense’ regulations
WASHINGTON: A group of the United States financial industry’s most powerful leaders, including Warren Buffett and Laurence D. Fink, released a set of what they called
“common sense” recommendations for public companies to improve their corporate governance and relations with shareholders.
BlackRock Inc’s Fink, JPMorgan Chase & Co’s Jamie Dimon and Berkshire Hathaway Inc’s Buffett were among 13 executives that jointly issued a public letter and report yesterday.
Their suggestions include urging publicly traded firms to refrain from shortterm earnings forecasts, embracing corporate transparency and pushing for independent boards.
“We share the view that constructive dialogue requires finding common ground — a starting point to foster the economic growth that benefits shareholders, employees and the economy as a whole,” the letter stated. “To that end, we have worked to find common sense principles.”
Fink, who runs the world’s largest asset manager, already encouraged chief executive officers in a letter earlier this year to stop offering earnings guidance and to focus on long-term goals.
In the letter yesterday, the executives said if firms did provide earnings guidance, they should avoid inflated projections and forecasts should be realistic.
Another recommendation urges firms to account for stock-based compensation in their non-Generally Accepted Accounting Principles earnings.
Group members also said they would prefer companies not have multiple classes of stock, which grants some shareholders more say when voting. Bloomberg