One year ago discussions surrounding corporate law policy were driven by the Sarbanes-Oxley ‘backlash.” The Paulson Committee and others were warning about how excessive regulation and litigation would lead to the ruin of Wall Street. Turns out that Wall Street was eminently capable of ruining itself.
Now politicians on both side of the aisle are pushing the need for more regulation, and railing against greed, excessive salaries and golden parachutes. Seems we are all populists now (at least for the next 50 days). It will be interesting to see if the current crisis leads to a short term flurry of reforms of the type that followed the 2001 accounting scandals or to a more rigorous rethinking of how we regulate financial markets and corporate governance. Let’s hope for the latter.