(The news featured below is a selection from the news covered in the Federal Securities Report Letter, which is distributed to subscribers of the Federal Securities Law Reports.)

Corporate Governance Bill Introduced by House Leader

A bill establishing a bi-partisan commission to study corporate governance has been introduced by James C. Greenwood, Chairman of the House Subcommittee on Oversight and Investigations. The Corporate Governance and Market Integrity Commission Act, H.R. 5050, would create a Market Integrity Commission to study issues related to the governance of corporations in interstate and foreign commerce. The nine commission members, to be appointed by the president, would be charged with examining current practices in corporate governance and recommending steps in which the private sector, the investor community and Congress might take to improve ways in which publicly traded companies are governed.

The Commission would be expected to recommend new business practices to ensure that:

• Corporate accounting practices and standards are transparent and fully disclose all the relevant facts needed by investors to acquire a true understanding of a firm's economic health;

• Outside independent auditors are truly independent;

• Directors of public companies possess the independence, resources, knowledge and skill needed to guarantee management accountability and to faithfully represent the interests of shareholders; and

• Compensation packages for executives truly reflect performance and are linked to an increase in shareholder value.

The bill has 26 bipartisan cosponsors so far, including House Energy and Commerce Committee Chairman Billy Tauzin and subcommittee chairmen Joe Barton, Michael Bilirakis, Paul Gillmor, Cliff Stearns, and Fred Upton.