Who could argue with the recommendation by investment banker Derek Higgs and his distinguished panel that the majority of corporate board seats be reserved for independent, nonexecutive directors?

Well, Sternberg could -- and did. Politely declining to sign the letter, the 34-year-old Deutsche Asset Management CIO for Europe and Asia has bluntly challenged the proposed rule, which City money managers have received as if it were a codicil to the Ten Commandments.

For a start, Sternberg says, the difficulty of finding qualified nonexecutive candidates "may militate against good corporate investments." Why? Nonexecutives will tend toward conservatism. "Can you imagine the scene at Racal in the late 1980s?" the fund manager asks. "The guys from Vodafone walk into the meeting with a hundredweight of mobile telephones in a suitcase and say, 'Invest -- this is the future.' We know now that Vodafone was one of the best investment decisions ever, but would a board of a more conservative stripe have made that investment?" As proposed, he says, the Higgs doctrine of corporate governance "could be the new corporate taxation of the bear market."

Sternberg is quick to add, however, that money managers shouldn't take a hands-off attitude toward governance. In fact, he favors a more interventionist stance -- one in which shareholders act more like true owners and even sit on boards.