[categories: Washington Bankrutpcy attorney]
The NY Times, September 15, 2010 Section B reports in "Even as Companies Fail, Directors are in Demand" (Susanne Craig and Peter Lattman) that if you ruin a perfectly good company, chances are that you will be rewarded with another opportunity to repeat your failure.
See link to NY Times article: http://query.nytimes.com/gst/fullpage.html?res=9B06E5DD133FF936A2575AC0A9669D8B63&scp=1&sq=even+as+companies+fail%2C+directors+are+in+demand&st=nyt
"For 16 years, Marshall A. Cohen served as a director of American International Group, stepping down just months before the company’s near-collapse in 2008. Several months later, Mr. Cohen was again in demand, joining teh board of Gleacher and Company, a New York investment bank. Gleacher expanded its board last year to include not only Mr. Cohen, but Henry S. Bienen, who served as a diredtor of Bear Stearns from 2004 until its rescue by JP Morgan Chase in March 2008. On the second anniversary of the Lehman Brothers bankrutpcy, apointments like those of Mr. Cohen and Mr. Goldstein highlight how the directors of the companies at the center of the financial crisis – A.I.G., Bear Stearns and Lehman itself – still play an active role in the governance of corporate America." report Craig and Lattman.
"In many cases during the real estate bubble, directors approved the strategy that paved the way for executives to make risky investments on borrowed money. These directors also approved pay packages that fed the risk-taking. … Some board members, … say their experience on the boards of troubled companies made them stronger directors, giving them hands-on experience that will help them stop other companies from repeating the same mistakes." report Craig and Lattman in the NY Times.
Craig and Lattman quote the congressional Financial Crisis Inquiry Commision chairman Phil Angelides: "I don’t think there’s any question that a dramatic failure of corporate governance was a central issue of the crisis…" says Mr. Angelides.
The list of directors and officers from failed companies that went on to lucrative new directorship appointments for different companies is startlingly long:
Marsha J. Evans (formerly director at Lehman, now sits on boards of Weight Watchers, Huntsman and Depot, earning $500,000 annually).
Toronto lawyer Marshall A. Cohen (former director at A.I.G., now sits on the board of Gleacher & Company investment bank)
Henry S. Bienen (formerly director at the failed Bear Stearns, now sits on the board of Gleacher & Company investment bank)
Charles O. Rossotti (formerly director at the failed Merrill Lynch, now sits on the board of Bank of America)
Virgis W. Colbert (formerly director at the failed Merrill Lynch, now also sits on the board of Bank of America)
E. Stanley O’Neal (formerly CEO of Merrill Lynch, now sits on the board of Alcoa)
Robert A. Ingram (formerly a director at the failed Wachovia Bank, now sits on the board of semiconductor company Cree)
Stephen E. Frank (formerly director at the failed thrift Washington Mutual {and head of the WAMU director’s audit committee to boot!} now sits on the board of Las Vegas utility NV Energy)
IDEAS FOR ACTION: Next time you thoroughly mess up at work in such a grand and comprehensive way as to endanger and threaten the very existence of your employer, remind your boss that it is quite lucky for the company that you messed up so badly. Let the boss know that because of your incompetence and laziness, you should receive a raise and promotion for having made that error. You can explain to your boss that you deserve a raise and promotion because you will now be able to train other employees on how to avoid the same error, having made the error yourself. Now, this line of logic works for Messers. Frank, Ingram, O’Neal, Colbert, Rossotti, Bienen, Cohen and Ms. Evans. Why shouldn’t the same logic work for you?
