At the opening hearing of the Financial Crisis Inquiry Commission, the bipartisan committee formed by Congress to investigate the causes of the great financial meltdown, there were four chairmen of key Wall Street players in the crisis. There was much anticipation over the proceedings held today in Washington. Since its formation last spring, the Committee has had months to prepare for this day. But there was not a single probing question, as far as we could tell, from chairman Phil Angelides or any other member of the panel, about the role of the board of directors. This is a glaring omission, if you believe that boards matter and what directors did or did not do to avoid the disaster is an important part of the review.
It is one thing for boards to constantly underperform or are not taken as seriously by their executive chairmen as they should be, or as an independent, non-management, chairman might want them to be. It is quite another when an inquiring body appears to forget that, in law and in principles of modern business practice, the buck stops with the board of directors. Where were they?
We will have more on this disappointment soon.