Commission fears overly restrictive US governance

US corporate governance reforms must not overly restrict risk-taking and capital-market access, a new commission backed by the country's largest companies has warned.

NYSE Euronext's Commission on Corporate Governance, which includes high-profile executives, pension fund officials and legal experts, fears that restrictive risk management legislation will stagnate economic recovery.

Larry Sonsini, chairman of the commission, suggested that any new regulations must avoid overburdening corporations that are already struggling in current market conditions, Dow Jones reported.

He told the news agency: "Right now the concern is, let's not burden corporate America with overregulation on governance principles and lose sight of the effectiveness and competitiveness we need for our companies on a global basis."

Admitting that more transparency is required on executive remuneration, Mr Sonsini did, however, criticise plans to allow shareholders to have a direct say on the compensation structures of director-level staff.

This organisation will add to the debate surrounding the role that executives had in causing the economic downturn and the changes required to ensure management failures on this scale do not occur again.