State money managers who met with John Reed on Tuesday emerged convinced that the interim chairman of the
New York Stock Exchange
understands the need for "institutional reform" at the exchange, and that previous guidelines that were panned in some circles as lacking teeth were just "a baseline."
The group of governance advocates, including eight state treasurers, met with Reed for almost two hours Tuesday morning to discuss a report by former board member H. Carl McCall.
"Reed indicated in general, without committing to any specific reform at this point, that the McCall memo is a baseline from which he would build, that he would go well beyond it," said New York Comptroller Alan Hevesi. "That was extraordinarily encouraging to all of us."
According to Hevesi, Reed understands the need for "independent directors and a program for institutional change." The interim chairman is expected to unveil his program for reform in November.
Meantime, the group said it made some recommendations to add to McCall's memo, which include cutting the NYSE board from 27 members to 17 members, of whom a majority would be independent.
Separately, officials are pushing to separate the regulatory and business functions of the exchange.
Reed has recently said that he does not support splitting the two functions. At the news briefing, Hevesi said that the interim chairman "has suggested that the stock exchange has done a pretty good job of regulating itself over time," but he is still "open to any structural change."
Reed, a former chairman of
, was called out of retirement in September to preside over a restructuring of the NYSE after an uproar over former Chairman Dick Grasso's exorbitant pay package.