Michael P. Regan is a Bloomberg Gadfly columnist covering equities and financial services. He has covered stocks for Bloomberg News as a columnist and editor since 2007. He previously worked for the Associated Press.

(Corrected )

Thirteen  of the most powerful members of the financial and corporate elite dropped an "open letter" on Thursday to explain their "Commonsense Corporate Governance Principles." We all know what this means: It's the best day to mock open letters since 2010, when a bunch of financial and academic elites warned that the Federal Reserve's quantitative easing policy would create "currency debasement and inflation."

But who would be so foolish as to mock such powerful elites? Well, you've come to the right place. 

So without further ado, here are some Commonsense Principles to Mocking the Commonsense Corporate Governance Principles: 

Truly independent corporate boards are vital to effective governance, so no board should be beholden to the CEO or manage-ment. Every board should meet regularly without the CEO present, and every board should have active and direct engagement with executives below the CEO level;

Takeaway: Maybe this is the old copy editor in me, but I can't get past the hyphenation of "manage-ment." Clearly we've been doing it wrong all these years. But manage-ment has spoken, so I personally will start hyphenating this word immediately. Second, it's ironic that a call for independent boards and meetings without CEOs is being issued by a group so dominated by CEOs who also hold the title of chairman. (Of the 13 that signed, Mary Barra of GM, Warren Buffett of Berkshire Hathaway, Jamie Dimon of JPMorgan, Larry Fink of BlackRock, Jeff Immelt of GE, Lowell McAdam of Verizon and Bill McNabb of Vanguard (private company, but still) all hold the dual title.) Are they just oblivious to that irony? Nah, can't be that. These are smart people. So I'm assuming they have an ulterior motive: a watertight excuse to get themselves out of a bunch of boring board meetings. Manage-ment sure can be clever!

Diverse boards make better decisions, so every board should have members with complementary and diverse skills, back-grounds and experiences. It’s also important to balance wisdom and judgment that accompany experience and tenure with the need for fresh thinking and perspectives of new board members;

There they go with the hyphens again, this time in back-grounds. Also, let's just take one random board from the companies represented here and examine how much diversity and "fresh thinking" is aboard: Berkshire Hathaway. Nine white dudes, three white women. Number of members with the last name Buffett: two. Average approximate age on this board: 70. Average approximate tenure on board: 19 years.

Shades of Gray (Hair)
Warren Buffett and pals advise that corporate boards need 'fresh thinking.' The average age of his board is 70 and the average tenure is almost two decades.
Source: Bloomberg


Every board needs a strong leader who is independent of management. The board’s independent directors usually are in the best position to evaluate whether the roles of chairman and CEO should be separate or combined; and if the board decides on a combined role, it is essential that the board have a strong lead independent director with clearly defined authorities and responsibilities; 

Takeaway: LOL, yeah right. (See above.) Also, they forgot the hyphen in manage-ment.

Our financial markets have become too obsessed with quarterly earnings forecasts. Companies should not feel obligated to provide earnings guidance -- and should do so only if they believe that providing such guidance is beneficial to shareholders;

Takeaway: Just shut up and buy the stock, alright?  We'll issue guidance when we want to, like GM did on the same day this letter came out with the CEO's signature on it. 

A common accounting standard is critical for corporate transparency, so while companies may use non-Generally Accepted Accounting Principles (“GAAP”) to explain and clarify their results, they never should do so in such a way as to obscure GAAP-reported results; and in particular, since stock- or options-based compensation is plainly a cost of doing business, it always should be reflected in non-GAAP measurements of earnings.

Takeaway: Feel free to exclude "extraordinary" items like those nasty legal bills after the London Whale losses if you must. 

Effective governance requires constructive engagement between a company and its shareholders. So the company’s institu-tional investors making decisions on proxy issues important to long-term value creation should have access to the company, its management and, in some circumstances, the board; similarly, a company, its management and board should have access to institutional investors’ ultimate decision makers on those issues.

Takeaway: Everyone continue ignoring ISS and Glass Lewis, and trust manage-ment to sort things out among themselves. Also: "Institu-tional investors?" They're just trolling us with the hyphens now.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

(Corrects number of Berkshire Hathaway board members named Buffett in seventh paragraph.)

  1. I mean, really. You couldn't have found a lucky 14th?

To contact the author of this story:
Michael P. Regan in New York at

To contact the editor responsible for this story:
Daniel Niemi at