Lisa Kassenaar wrote an insightful piece for Bloomberg (December 29th) that examined how corporate boards, even in the era of Sarbanes-Oxley, have often failed to live up to their responsibilities. Kassenaar wrote,
As the credit crisis gripping the global economy stretches into a third year, corporate directors are facing a storm of scrutiny for the instances when they’ve failed to show up — to sound the alarm as imprudent investments piled up at Citigroup or Bear Stearns Cos., for example, or to right the strategy at General Motors Corp. as the company was losing touch with car buyers’ tastes and burning through cash…
… Nell Minow, who has been agitating for better corporate governance for two decades, says directors remain too friendly with their executives. Minow, who founded the Corporate Library, a research group in Portland, Maine, wants companies to make it easier to replace directors by giving shareholders a vote on every board member every year.
The gist of the piece is a battle remains between corporate governance advocates and shareholders versus executive management and boards. Read the piece for yourself and make up your mind on what side you stand. I remain in Minow’s corner. It is likely the new Obama administration will implement new regulations upon boards and management that come closer to corporate governance advocates.
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