A Real Life Fubar and Other Musings

The real life Fubar was noted in several commentaries on Twitter's confidential (yes, you read that right) S-1 filing with the SEC.  The Fubar is the JOBS Act itself; it's sort of amazing (though perhaps not) that the one time in recent years that our Congress acts in a bipartisan manner it comes up with a real mess.  I know that some feel otherwise, but for my money I refer to the write-up by Steven Davidoff (AKA "The Deal Professor") in The New York Times "DealBook" column; you can find that here.  I wish I could have said it better, but I don't think I could.  I believe it was Justice Brandeis who said that sunlight (i.e., disclosure) is the best disinfectant; the JOBS Act manages to pull off a rather amazing feat by keeping sunlight in the darkness.  And it galls me that Congress decided set the revenue bar for an "emerging growth company" at $1 billion per year.  I suppose that when you deal in trillions most every day, a billion does begin to seem like chump change.

Shareholder Value (But Not So Much)

Another great item in the press was a recent article by Steven Pearlstein on how shareholder value has damaged (and continues to damage) American business.  The only exception to the short-termism that many shareholder value advocates have generated is the long-term damage some of them have created (such as the recent JC Penney debacle brought to you by Bill Ackman).  I understand why some shareholders (and not just "activists") want to shake up boards and managements a bit - some shaking up never hurts - but the perception that shareholders know better than boards and should have the right to second-guess everything a board does risks, at least in my view, destroying the separation between ownership and management that has been a cornerstone of the American corporation.  There's an article that makes a similar point in Bloomberg.

More on Director Term Limits
I've posted some musings on this topic before.  I'm not really an advocate of term limits, and I'm really not an advocate of age limits.  Here's an article indicating that most companies shun term limits.  Interesting.  More interesting (at least to me) were some comments I heard at a great conference this week (it was the Fall Conference of the Southeastern Chapter of the Society of Corporate Secretaries and Governance Professionals in Atlanta).  Specifically, the directors on one panel - including one gentleman who looked like he might be approaching retirement age (but was clearly as sharp as they come) - indicated that they were fine with age limits.  We didn't have an opportunity to go into their rationales in detail, but I wonder if they include that age limits provide a rather simple mechanic to get rid of dead wood, and if some great board members have to leave "prematurely" it's worth it.