Edward C. Johnson, III, was the CEO of Fidelity mutual funds and also the chair of the Fidelity board. In 2004, the SEC issued a regulation requiring chairs at mutual funds to be independent of management, forcing Johnson to resign as chair. Johnson opposed the SEC action. Here are two arguments he made:
a. "Mandating an independent chairperson is akin to requiring that every ship have two captains. . . . If a ship I was sailing on were headed for an iceberg, I'd want one-and only one-captain giving orders. I'd like to know that he'd spent some time at sea and knew what he was doing."
b. "If a wrong-doer is tempted to try some abuse against fund shareholders, which board chairman would they rather try sneaking it past-an industry veteran with a direct and personal interest in the fund-or a chairman with 40 years experience making carbonated beverages, and who has just flown in for a two-day board meeting?" Summarize Johnson's arguments against independent chairs in your own words. Also suggest responses that might be made by a supporter of the SEC regulation.