Although industry executives expected SEC Chairman Christopher Cox to let the independent directors rule to fall by the wayside, insiders now tell The Wall Street Journal that he intends to bring it to a vote yet again, and find a compromise on the hotly contested issue of requiring fund boards to be overseen by independent directors. The SEC is expected to keep the requirement that 75% of a fund’s board be independent but rather than requiring the chairman to hold one of those seats, it might assign a lead independent director and give that person greater responsibilities.
As to whether Cox succeeds, it will certainly be a test of his consensus-building skills. Two of the commissioners who voted on the rule in 2005 are still with the SEC—Republican Paul Atkins (against the rule) and Democrat Roel Campos (for the rule—while two other new commissioners haven’t made their positions known. They are Republican Kathy Casey and Democrat Annette Nazareth.