That sentiment was echoed in an Aug. 1 report by the Council of Institutional Investors, which represents 130 pension funds. The group said the NYSE treats investors as "an unimportant constituency rather than the ultimate one."
A revamping of the board could lead to a second wave of reform: changes in the way the Big Board trades its listed stocks.
Grasso oversaw a number of technological upgrades during his eight-year tenure as chairman, but critics say it was simply a veneer meant to mislead people into believing the trading system had truly been updated.
Grasso's supporters say the NYSE method of trading has endured because it is superior to all-electronic systems. The human element, they say, can help dampen stock volatility, especially in periods of heavy volume.
But detractors say the NYSE's structure allows floor traders to abuse investors through a variety of improper trading practices.
The effect, they say, is that floor brokers and specialists, with their unique insight into stock-trading patterns, can make money at the expense of investors. Indeed, the exchange this year has been investigating whether some of the most prominent specialist firms have engaged in such behavior.
Some observers believe the best way to prevent such infractions is to separate the NYSE's regulatory operations from the market operations.
The NYSE not only runs stock trading but also polices the actions of the 1,366 member brokerages that own the exchange.
"That's a huge conflict of interest at the heart of the exchange," said Benn Steil, senior fellow at the Council on Foreign Relations.
Likewise, the NYSE serves as a principal regulator of the 2,800 companies that list their shares there.
To keep their stock listings the companies must abide by the exchange's rules on corporate governance -- for example, requirements involving the kinds of matters that must be put to a vote of shareholders.
The NYSE has had to balance some investor activists' calls for greater disclosure and transparency in the affairs of its listed companies against many of the companies' desire to avoid more costly regulation.
There is precedent for separating the regulatory function: NASD, formerly known as the National Assn. of Securities Dealers, split off its regulatory function from the Nasdaq Stock Market in the late 1990s.
Another idea that is generating renewed debate is whether the NYSE should take itself public by selling stock to outside investors.
That would force the exchange to be more open about its operations and could eliminate some of the incentives for floor brokers and specialists to engage in questionable trading, some experts say.
But new ownership could culminate in a great symbolic loss: the closing of the NYSE's historic trading floor at 11 Wall Street. Detractors say the floor is costly and inefficient and that the pressure of public ownership would probably force management to close it in favor of an entirely computerized trading system.
"The new owners would have no incentive to keep that floor," Steil said.
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Who's on the board
The NYSE's board includes exchange officers Richard Grasso, Robert Britz and Catherine Kinney, and the following individuals from the securities industry and the public:
*--* Director Company/organization Term expires Madeleine K. Albright Albright Group 2005 Herbert M. Allison Jr TIAA-CREF 2005 Carol Bartz Autodesk 2004 James E. Cayne Bear Stearns 2004 James M. Duryea J.M. Duryea 2004 Robert B. Fagenson Van der Moolen Specialists 2005 Laurence D. Fink BlackRock 2004 Andrea Jung Avon Products 2005 William B. Harrison Jr J.P. Morgan Chase 2004 Mel Karmazin Viacom 2005 Kenneth G. Langone Invemed Associates 2004 Peter N. Larson Brunswick 2004 Gerald M. Levin AOL Time Warner 2004 John J. Mack Credit Suisse First Boston 2004 H. Carl McCall HealthPoint 2005 George C. McNamee First Albany Cos 2005 E. Stanley O'Neal Merrill, Lynch & Co 2005 Henry M. Paulson Jr Goldman Sachs Group 2005 Philip J. Purcell Morgan Stanley 2005 Christopher C. Quick Fleet Specialist 2005 Juergen E. Schrempp DaimlerChrysler 2004 Larry W. Sonsini Wilson Sonsini Goodrich & Rosati 2005 William B. Summers Jr McDonald Investments 2004
Source: New York Stock Exchange
Staff writer Tom Petruno contributed to this report.