SEC Approves Tougher Listing Standards

An NYSE representative said the changes from the original proposal came out of various hearings over the last year. While some provisions were softened, others were toughened, the representative said.

The weakening of some of the rules appears to have been part of a quest by the SEC for uniformity between the two exchanges, said Patrick McGurn, special counsel and senior vice president at proxy adviser Institutional Shareholder Services.

"In this quest for uniformity, you sometimes got the lowest common denominator instead of the highest," McGurn said.

Despite this, the new rules already are having a positive effect on corporate governance. Many corporations already have started shaking up their boards and committees to meet the new guidelines, he said.

The new rules also should allow investors to keep a better eye on how companies are being run, McGurn said. In the past, shareholders were forced to argue with corporate management about the process and the make-up of corporate boards, he said. Now investors can focus on the boards' actual decisions, he said.

"It's up to investors to set a new ceiling [for governance]," McGurn said. "I think they can do that now because the floor is so much higher than it ever has been before."