members keep jobs despite links to corporate
doesn't seem to matter when corporate directors
get tangled in business scandals or are accused
of sketchy oversight - many still get to hold on
to their jobs no matter what.
consider that three members of the Enron Corp.
board before the energy giant's 2001 collapse
still are directors at U.S.-based companies.
Same goes for two WorldCom directors who sat on
the telecommunications company's board when it
became one of the largest corporate failures in
just the start. Many of the nation's biggest
companies have board members with spotted pasts.
So much for all the promises from corporate
America to improve boardroom integrity.
there is the theory that those who fell asleep
at the wheel before won't dare to shirk their
responsibilities again. For some, that may very
well be true, but there is no guaranteeing such
leaves it up to companies to decide whether they
are willing to take such a risk by letting these
people join or stay on their boards - and it
appears that many seem unfazed by past mistakes.
Richard McGinn, former Lucent Technologies Inc.
chairman and CEO, who was forced out in fall
2000 after the company warned for the fourth
time in a year that its profits would be weak.
Soon after, the telecommunications firm
disclosed that it had prematurely booked $679
million in revenues.
all that, he is still on the board of American
Express Co., where he has served as a director
financial services company may have reason to
reconsider that decision. Earlier this month,
federal regulators said they were considering
civil charges against McGinn and two other
former Lucent employees for their role in an
alleged bribery and corruption scheme involving
its Saudi Arabian business in the 1990s.
troubled insurance giant Marsh & McLennan Cos.,
five company executives recently were ousted
from the firm's board, but the 10 outside
directors not only are keeping their jobs at
Marsh, but those who have board positions
elsewhere have held on to those spots, too.
Attorney General Eliot Spitzer sued Marsh in
October on accusations of bid rigging, price
fixing and accepting incentive commissions from
insurance companies in exchange for steering
business their way.
interesting is that companies have the ability
to push out those directors with questionable
pasts, since most board members don't have
employment contracts. But most companies aren't
quick to show them the door, and when they do,
they use excuses - such as the director has
don't like to say a director got fired because
that calls into question their business judgment
in hiring them to be on the board in the first
place," said Paul Hodgson, senior research
associate at The Corporate Library, a governance
It was a
one-sentence news release last November that
announced the resignation of Boeing CFO Michael
Sears from his board position at Sprint Corp.
after just a six-month tenure. Nowhere in the
release did it mention that his departure came a
day after Sears had been fired by Boeing Co. for
his alleged role in illegally negotiating an
executive job for the Air Force's second-ranking
acquisition official while she still had
authority over billions of dollars in Boeing
contracts. Sears pleaded guilty to that
left, it was up to shareholders to connect the
dots as to why. What would have been so hard
about telling the truth?