Directors and management of public companies need to be more accountable to shareholders is the message that Caldwell Securities Ltd. is pressing in a full page ad in today’s The Globe and Mail.

The letter states, “Clarity and transparency are crucial to understanding the true quality of a company’s earnings and financial position. It is your responsibility to provide the salient information in an understandable form and without attempts to hide key data.”

It’s an issue that’s screaming at everybody and somebody has got to say something says company chairman Thomas Caldwell. While he doesn’t consider himself a crusader he does want to start the ball rolling to help establish better disclosure policies, higher ethics and moral standards as well as greater accountability.

Key problems Caldwell sees in the investment industry are spiraling executive compensation structures, a much too cozy relationship between research and corporate finance, aggressive accounting policies and over regulation.

“Paying CEOs tens of millions of dollars, often by significantly diluting the ownership of existing shareholders through the use of stock options, is a form of plundering,” reads the letter and it further says, “Morality, ethics, trust, judgement and accountability cannot be legislated, but they are fully expected and indeed, demanded by company owners.”

The conflict between a dealer’s corporate finance department and its research analysts is at the forefront in the news recently with a probe into Merrill Lynch & Co. Inc.’s suggested violation of U.S. securities laws stemming from allegations it padded its research to attract investment banking deals.

Caldwell plans to turn some of its research attention to forensic accounting in an effort to expose “Boards of Directors and managements who do not live up to the trust placed in them.” And while Caldwell agrees that it’s much easier to point out problems then to offer solutions his main goal is to “turn lights on brighter and hold directors’ feet to the fire.” But he doesn’t see increased legislation as the answer. In fact, he says, the industry in over-regulated as it is and there’s too much focus on the individual advisor who may not be 100% ethical but then the monster abuses by some companies falls through the cracks, he says.

“What these people don’t realize is that they’re initiating structural damage to our capital markets and these are the forefront issues,” he says.

The letter addressed to Boards of Directors and Management of publicly traded companies is signed by Thomas Caldwell, chairman of the independent Toronto-based investment firm and ran on the back page of the Review section today. The same ad ran in the National Post on April 20.

Caldwell says there’s more where they came from, too.