Report on Corporate Rules Is Assailed

Hubbard said the group has had little contact with Paulson since it was formed in September. Jennifer Zuccarelli, a spokeswoman for Paulson, said the Treasury secretary was not involved in the committee's work , but "we are always open to hearing new ideas from respected leaders."

In a speech last week, Paulson called for pruning nettlesome class-action lawsuits and rethinking duplicative regulations. He also promised to hold a separate conference early next year to address market competitiveness. That meeting would take place in a roundtable format and include industry and investor advocates. The members of the capital markets committee were tilted more toward industry rather than investor advocates.

"Where are the people who represent institutional and individual investors?" said Duke University securities law professor James D. Cox. "I see this as a very pro-executive position, well intentioned but misguided."

The group's recommendations do not uniformly give comfort to business. Executives at the U.S. Chamber of Commerce and elsewhere raised questions about the report's advocacy of increased shareholder democracy, including moves to give investors the right to vote on "poison pill" takeover defenses in certain cases and perhaps a better chance to propose candidates for corporate boards, a hotly contested area.

Three weeks after Democrats regained control of both chambers of Congress, Hubbard, the group's co-chairman, took pains to say that many of its proposals could be enacted by securities regulators and the President's Working Group on Financial Markets, made up of the leaders of the SEC, Treasury Department and Commodity Futures Trading Commission.

Sen. Christopher J. Dodd (D-Conn.), soon to be chairman of the Senate Banking Committee, said in a statement that he would read the report as a "valuable contribution." But, Dodd added, "We must not damage the fundamental rights and protections that underpin the investor confidence critical to the success of our capital markets." Dodd said the country already has "the most effective system of laws and regulations ever designed and implemented."

A spokesman for the incoming House Financial Services chairman, Barney Frank (D-Mass.), said the lawmaker had yet to read the report.

Ross said he became alarmed after leaders of foreign firms in which he invests balked at issuing stock in the United States because of costs and regulatory uncertainty. "If it does nothing else than become the lightning rod for both sides of the discussion, that'd be good," he said.