Short title

This Act may be cited as the

Corporate Governance Reform Act of 2009

Independence of chairman of the board

The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended by inserting after section 10A the following new section:

10B.

Independence of chairman of the board

(a)

Independence requirement

The chairman of the board of directors of an issuer shall be independent. (b)

Prohibition on service as executive officer

An individual may not serve as an executive officer of an issuer while serving as the chairman of the board of directors of such issuer.

Risk management committee

(a)

In general

The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.), as amended, is further amended by inserting after section 10B the following new section:

10C.

Risk management

(a)

Risk management committee

(1)

Independence required

Each member of the risk management committee of an issuer shall be independent. (2)

Duties

The risk management committee of an issuer shall periodically review the risk management policies of the issuer. (b)

Chief risk officer

Each issuer shall have a chief risk officer who shall— (1)establish, evaluate, and enforce the risk management policies and procedures of the issuer; and (2)report directly to the risk management committee.

(b)

Definition

Section 3(a) of the Securities Exchange Act (15 U.S.C. 78c(a)) is amended by adding at the end the following:

(65)

Risk management committee

The term risk management committee means— (A)a committee (or equivalent body) established by and amongst the board of directors of an issuer for the purpose of overseeing the risk management policies and procedures of the issuer; and (B)if no such committee exists with respect to an issuer, the entire board of directors of the issuer.

Compensation committee

(a)

In general

The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.), as amended, is further amended by inserting after section 10C the following new section:

10D.

Compensation committee

(a)

Independence required

Each member of the compensation committee of an issuer shall be independent. (b)

Duties

The compensation committee of an issuer shall periodically review all compensation practices and structures of the issuer.

(b)

Definition

Section 3(a) of the Securities Exchange Act (15 U.S.C. 78c(a)), as amended, is further amended by adding at the end the following:

(66)

Compensation committee

The term compensation committee means— (A)a committee (or equivalent body) established by and amongst the board of directors of an issuer for the purpose of overseeing and reviewing the compensation provided by the issuer to the executives and employees of the issuer; and (B)if no such committee exists with respect to an issuer, the entire board of directors of the issuer.

Shareholder vote on executive compensation

The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended by inserting after section 14 the following new section:

14A.

Annual shareholder approval of executive compensation

(a)

Separate resolution required

Any proxy or consent or authorization for an annual or other meeting for which the proxy solicitation rules of the Commission require compensation disclosure of the shareholders occurring after the end of the 1-year period beginning on the date of enactment of this subsection, shall include a separate resolution subject to shareholder vote to approve the compensation of executives as disclosed pursuant to the compensation disclosure rules of the Commission (which disclosure shall include the compensation discussion and analysis, the compensation tables, and any related material). (b)

Rule of construction

The shareholder vote referred to in subsection (a) shall not be binding on the board of directors and shall not be construed— (1)as overruling a decision by such board; (2)to create or imply any change to the current fiduciary duties of such board; (3)to create or imply any additional fiduciary duty by such board; or (4)to restrict or limit the ability of shareholders to make proposals for inclusion in such proxy materials related to executive compensation.

Study on director certification

(a)

Study required

The Securities and Exchange Commission shall carry out a study on the feasibility of requiring, and the logistics of implementing, a certification process under which an individual seeking to become a member of the board of directors of an issuer would have to first be certified by the Securities and Exchange Commission as having the experience and expertise necessary to carry out the functions of a member of the board of directors of such issuer. (b)

Report

Not later than the end of the 1-year period beginning on the date of the enactment of this Act, the Securities and Exchange Commission shall submit a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate containing the conclusions of the study required under subsection (a).

Regulations and prohibition on listing for non-compliance

Not later than the end of the 6-month period beginning on the date of the enactment of this Act, the Securities and Exchange Commission shall— (1)issue regulations to carry out the amendments made by this Act; and (2)by rule, direct the national securities exchanges and national securities associations to prohibit the listing of any security of an issuer that is not in compliance with the requirements of any portion of sections 10B, 10C, or 10D of the Securities Exchange Act of 1934.

Effective date

The amendments made by this Act shall take effect with respect to issuers after the end of the 1-year period beginning on the date of the enactment of this Act.