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The article presents a perspective on the legal and political issues the Securities and Exchange Commission (SEC) is facing in the U.S. It was believed that it would be necessary to examine and rebuild the relationship between the Commission, the markets, the Congress, its international counterparts and state regulators for stable economic performance. The economic effects of the SEC situation are also discussed in the article.

In this commentary on Bebchuk and Fried s Pay Without Performance, the former SEC Chairman begins by declaring, “I have problems with exorbitant executive pay precisely because I care about markets and private enterprise. These huge pay checks... undermine corporate governance and send a signal that boards are willing to spend shareholders' money lavishly and with too little oversight.” The author calls for a number of regulatory reforms, including expensing of stock options, broader and more complete disclosure of compensation, greater independence of directors, and empowerment of shareholders. At the same time, he notes that corrective market forces are already at work in the form of companies like Institutional Shareholder Services that monitor corporate governance and decision-making. [ABSTRACT FROM AUTHOR]