Governance Issues at the New York Stock Exchange
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Case Details:
Case Code : BECG035
Case Length : 20 Pages
Period : 2003 - 2004
Pub. Date : 2004
Teaching Note :Not Available
Organization : NYSE
Industry : -
Countries : USA
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BECG035) click on the button below, and select the case from the list of available cases:
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts
The Working of NYSE
NYSE is defined as a "member-owned co-operative and self-regulatory organization that serves the public as the nation's principal securities market, its principal self-regulator and its principal source of governance standards."
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It comprises of three constituencies, viz., broker-dealer members, listed companies and the investing public. The specialist firms and floor brokers are grouped under broker-dealer members. The specialist firms employ specialists involved in the trading of stocks of particular companies.
At NYSE, trading takes place at one central location - the trading floor (Refer Figure I) where both buyers and sellers compete to get best price for their clients. Usually, each stock is assigned a trading post, with specialists managing the auction process. NYSE has the authority to regulate securities firms dealing with public accounts in the US. The Enforcement Division oversees the working of listed companies...
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Governance Structure at NYSE (Pre-reform)
NYSE's governance structure comprised five important elements:
the Board of Directors (BoD), standing and advisory committees, a nominating committee, its professional executive management, and its 'not-for-profit' status.
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BoD and Standing and Advisory committees
The 1,366 broker-dealer members of the exchange elected the BoD which
consisted of 27 members (12 industry directors, 12 non-industry
directors and 3 members of the office of the chairman) . (Refer Table I)
No director was allowed to be on the board for more than three
consecutive two-year terms. The NYSE constitution defined an industry
director as "(1) an individual member, (2) an individual who is a
principal executive, general partner or control person of a member
organization, or (3) a principal executive of an organization whose
"principal"subsidiary is a member organization."Non-industry directors
did not belong to the securities industry... |
Excerpts Contd... >>
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