Why Are AIG’s Directors Still in the Room?

March 2, 2009

AIG has a current board of 11 directors. Of those, seven have been on the board since at least 2006 and five have been there since 2005 or before. Two directors have been around since the 1990s. One of them is Martin Feldstein, who has been in that position since 1987. He is also a member of President Obama’s Economic Recovery Advisory Board. If anyone can explain that unique convergence of events, maybe they can tell us when the Dow will be back up to 14000.

Question to Treasury Secretary Timothy F. Geithner: Why are these directors, who were presiding (or was it slumbering?) over the company when the seeds of its record disaster and taxpayer calamity were being sewn, still allowed anywhere within a five block radius of AIG’s boardroom?

in $700 Billion Bailout,AIG,Board of Directors,Corporate Governance,Hot Issues,Panic on Wall Street/Outrage on Main Street,Wall Street and Main Street,Wall Street Bailout

{ 2 comments… read them below or add one }

1 joe milkes March 9, 2009 at: From the outside (I’m a small business type) it seems like government, politics and Wall St. are rife with conflicts of interest. Although you’d like to think people would be ethical, that is not always the human condition. The more money involved, the worst people behave. The ones who have power are sometimes the ones who shouldn’t have it. Big shot execs think they are entitled no different than the gov’t entitlements that are doled out to the masses. Thain is a great example. But I just don’t see how there is any incentive for change to take place. Even after the RTC mess, greed, motivation to make a buck and self delusion led to an even bigger disaster. The combination of this with the current social advent of “truthiness”, “spin” and softing of ethics led to the disaster, in my view. The outrage won’t end because the behavior isn’t going to change anytime soon. Having been a social worker in a prior career, I saw how hard it is for people to change. This is probably no different with govt or big corps.
2 Derek March 19, 2009 at: If such a failure to protect shareholders occured on these bonus schemes isn’t it plainly obvious why this company could write open ended derivative contracts without consideration to its own equity. Its a good thing Harvard is involved – its a contributor to bringing down the US powerhouse.

Derek from Canada