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24 caret board members get’s expensive

The recent election of Paige Pierce to the FINRA board had us doing some head scratching. While we acknowledge the small firm representation and large firm representation on the board of governors, is it too much for members to ask for a scale back on the sheer number? Currently, there are 24 board members comprised of public and industry people. By comparison, Apple, the largest and most valuable company in the history of mankind has 8 board members. How can it be that Tim Cook and company can somehow manage a TRILLION dollar company with hundreds of thousands of employees, thousands of stores millions of downloads and manufacturing spread across every continent, but FINRA needs 24 board members?

Exxon Mobile is the largest oil producer in the world. They have refineries, gas stations on every corner, a research and development complex, make various petroleum based products and employ 70,000 people worldwide with just a 10 man board? Are we to believe that dealing with securities regulation is more complex than Exxon negotiating drilling in Anwar or Saudi Arabia? Does it take more board members at FINRA to navigate bond reporting requirements than is does take Apple board members to approve a new contract with China? Its crazy how much is spent by an organization like FINRA that is classified as a nonprofit. Just salary alone for the 24 members of FINRA equates to $1,500,000 per year. This does not include the travel and lodging requirements of all these board members who attend not just quarterly meetings, but also go to regional meetings as well. It really is mind blowing to think that an organization needs this many board members being paid to essentially look at the FINRA CEO and nod in agreement on any proposal.

The SEC is the one who nudged FINRA into having a more publicly represented board, however this has become a Board on steroids. Three small firm representatives, three large firm, one midsize and on mutual fund representative brings the total to 8. Did you really need to bring in 16 more board members? For an organization that continues to largely run at an operational loss, this board seems to be a little over board (pun intended). We believe it’s time to get down to a moderate size that can effectively manage the nonprofit organization without bankrupting it. Let’s be realistic, most of these public members literally serve no purpose and can provide as much insight on securities regulation as me giving insight on what a woman’s thinking. I’ve been married almost 30 years and still can’t figure it out! There are several members who work for Harvard law school and a couple others that I am fairly confident have never made a cold call ever in their life, but they are getting paid handsomely to tell everyone what rules to follow when soliciting. Some times less is more and it is time to downsize the FINRA board.

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Date
August 31st, 2018

Author
jbusacca

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