Accountability

Many representatives in questioning the Bank CEOs yesterday used the "we are now your shareholders" trope. In my mind, it only strengthened how little these CEOs have been accountable to their actual shareholders.

I think its fair to observe that there is -- and has been for years -- a systematic accountability problem in our public equity markets.

The usual sort of reform proposal in response to this is to create penalties for Board of Directors that some arbiter judges negligent. This is, to my mind, the sort of ill thought out mess that creates more problems then it solves.

A more thoughtful -- and free enterprise -- solution would recognize that it is the sole responsibility of shareholders to hold directors and management in line, seek to identify and understand the systematic reasons why shareholders have not and pursue policies that address them.