Tuesday, March 15, 2005

It's Lonely at the Top

Another imperial CEO, Maurice Greenberg of AIG, was shown the door yesterday, joining Harry Stonecipher of Boeing, Franklin Raines of Fannie Mae, Carly Fiorina of HP and Michael Eisner, whose reign at Disney is being cut short by its board. Last year Charles Cawley of MBNA was quietly eased out of the credit card giant he started.
This NYT analyis includes some comments from corporate governance expert Charles Elson here in Delaware:
After the collapse on Enron in late 2001 and WorldCom in 2002, Congress required more vigilance by directors, auditors and other gatekeepers in the Sarbanes-Oxley corporate-overhaul law. That measure, which strengthened auditor independence and made boards more responsible for financial results, created a model of corporate governance that is "designed as a circuit breaker," said Charles M. Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware. "Lately, the signal is that the governance mantra is actually working.
"The question is, Are boards getting too active? Are they pulling the trigger too quickly? I don't think so," Mr. Elson said. "They are looking at these terminations over the long term."

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