Words like “transparency,” “oversight,” and “regulation” that ordinarily make a free market capitalist shudder, peppered the former Goldman Sachs chief exec’s plan for a credit market overhaul. Under his new proposal, the Federal Reserve would expand its authority to investigate any financial institution or industry it deemed economically suspect. Lawmakers have not enthusiastically endorsed this proposal stating its mandate did not go far enough. However, the creation of a new Mortgage Origination Commission to oversee and regulate mortgage lending practices did garner substantial support. The former investment banker’s blueprint for oversight is currently being debated by lawmakers.

Corporate executives managing public companies whose profits plummeted under their watch are feeling the heat from the new call for transparency. Investors don’t seem to mind CEO perks when profits are booming. However, shareholders want to know what CEO and top executives are being paid not only in salary but formerly hidden perks as well. The SEC cannot regulate salaries in a capitalist economy. Yet it can allow shareholders full disclosure on executive comp by requiring corporations to reveal all chief executive perks exceeding $10,000.

Fueled by Germany’s official investigation of tax evaders, the 27-nation EU is pressuring Switzerland to relinquish its tight grasp on depositor confidentiality. The majority of Swiss citizens (80%) support the banking confidentiality laws. Only forty percent, however, support this provision for foreign citizens. EU authorities are preparing for a battle with secretive Swiss bankers. France, which takes over the presidency of the EU later this year, vowed to join forces with Germany and push for Swiss banking reforms. The pressure for reform could have a major global market impact as confidentiality is a cornerstone of the Swiss banking industry.

It also gives shareholders the right to vote on executive “exit” compensation should the company be sold or taken over, or if executives leave the firm with or without cause. One of the concerns of executive compensation in public companies for lawmakers is to limit possible abuse of sales and takeovers of companies. Departing executives had been accused of facilitating sales of companies solely for personal gain from a “golden parachute” windfall. This practice is often seen by observers and shareholders alike to be an abandonment of executive responsibility to the overall financial health of the firm. Also lawmakers felt the need to legislate shareholder voting rights to discourage executive compensation not commensurate with performance. Dozens of company executives in recent years have received enormous pay packages as their company stock sank, even in some cases as their companies filed for bankruptcy.

Unless US corporate law is significantly overhauled the US Congress does not have the legal right to legislate executive pay of companies. Hence, the House bill is “non-binding,” which translates to “unenforceable.” The United States Senate has not adopted the “non-binding” legislation passed by the House one year ago. However, the House is currently investigating whether three chief executives of failing banks in the subprime mortgage markets were illegally paid “performance” bonuses for non-performance losses.

In Great Britain and Australia, advisory votes on executive pay are an established annual event. In the U.S., reverence for the free market system and lack of regulations make this a difficult issue to legislate. Many business experts believe the market should correct these abuses itself. (See The Board Room.)

Passengers, including children and pregnant mothers, were held captive on planes without water and food for up to ten hours due to severe weather conditions. The outrage from passengers was enough to spur lawmakers to quick action. The passenger bill of rights insured passengers would be supplied with ample water, snacks, fresh air, and clean bathrooms if held on the tramac for over three hours. A federal judge upheld the contested law in December. The airline industry challenged the decision again in Appeals Court where it was overturned. The appeals court determined that only federal law had jurisdiction over the airline industry. There has been no federal airline passenger bill to date for US travelers.

However, JetBlue Airways known for its phenomenal customer service was also one of the worst violators of passenger’s rights due to extended delays in February 2007. CEO David Neeleman was not waiting for lawmakers to force him to do the right thing. JetBlue representatives called every passenger affected by the delays, allowed them to air their grievances, apologized for the experience, and explained their remedy to avoid such disasters in the future. It remains a business management 101 textbook example of how to turn failure into triumph. JetBlue’s swift and thorough response restored the trust customers had lost without a law to enforce it.

By March 2009, no vanity or health products made in the EU can be tested on animals. Nor can any products be sold that have been produced outside of the EU and have used animal testing. A compromise was reached exempting animal testing for toxicity and fertility. The cosmetics industry is burdened with finding new non-animal testing methods for their products. For the animals however, it seems a Godsend.

“The international consensus is growing that the planet is facing irreversible climate change unless action is taken quickly. The EU has already formulated a clear response in the shape of an integrated energy and climate change policy, a commitment to cut emissions of ‘greenhouse’ gases by at least 20 % by 2020, and a promise to take the lead in international negotiations to adopt even more ambitious targets. This will help to prevent the world’s temperatures rising by more than 2 °C, the level which is increasingly thought by scientists to be the point of no return.” —From Europa – EU Press Room (Sept 2007)

“The law -- designed to combat forced labor, withholding of pay, unwarranted dismissals and other abuses -- represents a major victory for Chinese workers who for decades have complained of companies that would stop at nothing to wring out profits. It has prompted legions of workers in recent months to become bolder about quitting and about staging strikes to demand improvements in work conditions and wages.” —From the Washington Post, April 2008