Sometimes landmark court cases turn out to be little more than bumps in the road. Today’s Supreme Court ruling against the Public Company Accounting Oversight Board is one of those times.
We will, of course, hear all manner of headlines and hyperbole about the case, Free Enterprise Fund v. PCAOB, and how it is a victory for conservative activists who had been trying to undermine the whole governance regime spawned by the Sarbanes-Oxley Act. And that’s accurate; the parties pushing this case finally won their argument that the way PCAOB board members are appointed is unconstitutional. That argument has merit, too. The PCAOB is an unusual constitutional creature—an appointed board overseen by an appointed board—and the court reached a reasonable decision that such a beast is too far removed from presidential authority. Its solution: to give the Securities and Exchange Commission power to remove PCAOB members at will.
