More on Corporate Malfeasance

NYTimes business section article by Gretchen Morgenson reports on board members who were there when big banks crashed and burned, just "glide to the next boardroom"


Thomas P. Gerrity, prof of mgt at Wharton Bus School, U of Pa; formerly on board at Fannie Mae; now on board of Sunoco

John Wulff former chairman of Hercules (chemicals) was also on the board of Fannie Mae during the meltdown; also on the board of Sunoco.  He was also on the board of Moody's when it failed to analyze the risk in the mortgage bubble.

Robert Parry, former board member of Countrywide the failed (bought at file sale by Bancofamerica) subprime lender; now on board of Paccar

William G. Reed, Jr; was chair of Washington Mutual (largest bank to collapse in US history) is also on the board of PACCAR.

Hugh  Grant , formerly of IndyMac (failed spinoff from Countrywide) on board of TetraTec

Also  Patrick Haden went from failed IndyMac to Tetra Tec.

Now you could argue these guys have learned there lessons, but not one has made any public statement of apology, knowledge, or accountability.   Just move on and cash a new paycheck of 100's of thousands for a few meetings a year!

All these directors join their boards with legal fiduciary responsibility to protect shareholder interests, but tend to be silent partners with management and not rock the boat.

"Here's a conversation you'll never hear. ' Yes I get paid $475,000 a year.  I play golf with the CEO;  he's a personal friend.   I go to interesting places for board meetings, I am around interesting people, and I never would say one word that would jeopardize my position on the board/"...Frederick Rowe, President  of Investors for Director Responsibility.

...and by the way, whom do you think votes for those obscene executive salaries and benefits that by the way encourage the kind of short term risk taking that lead to the crash?

The article also points out that it is nearly impossible for investors to fire an incompetent board member.  The rules are stacked in many ways for the executives that run the companies to select and manage the boards to whom they are supposed to be accountable.

That this can continue is a continuing tribute to the power of corporate lobbying power, and perhaps the notably short term memory of the American public.