Monday, December 04, 2006

Page Scandal

I’m plodding through (did I say that? I meant "eagerly devouring") last week’s Interim Report of the Committee on Capital Markets Regulation and will post some thoughts later this week. The report, which suggests regulators of public companies should indulge in a bit more cost-benefit analysis before piling on new rules, inspired some predictable reactions. The American Enterprise Institute loved the Committee's blame-the-regulator mindset but found its recommendations "conventional and weak," while Eliot Spitzer (you'd think he'd be in a better mood now that he's going to be governor) termed the proposals "wayward and wrong." My favorite comment came from former SEC Chairman Richard Breeden, who called the report "very elegant whining."

The Committee is made up of twenty-two bigshots who modestly describe themselves as "corporate and financial leaders." Twenty-one are men. I guess only one female "corporate leader" had time to help out; the rest are too busy wreaking havoc on the world.

Like any self-respecting 152-page document produced in a business milieu, the report contains an "executive summary," about which the Committee had this to say:

"Our Executive Summary is just that – a summary. The issues discussed there are dealt with in further detail in the main body of the report and we strongly urge you to read the full discussions as they provide important context and data without which the summary would convey too quick a treatment of these complex issues."

About three-quarters of the Committee members have day jobs that carry exalted titles like CEO, President, or Chairman, making them the target audience for executive summaries. I hope from now on their underlings will feel free to drop on the boss’s desk a document the size of a Gutenberg Bible and tell him he must read it cover-to-cover or he won’t have a clue what’s going on. Having publicly admitted executive summaries are worthless, whining about his reading assignment would be inelegant.