New Posting on Harvard Law School Blog

The corporate governance blog of Harvard Law School is running another guest column by me, this time on the Countrywide Financial meltdown. I introduce some issues about the company’s decidedly subprime corporate governance and CEO compensation practices which have not been raised anywhere before, except at Finlay ON Governance, as our consistently astute readers already know. Here is an excerpt:

The lesson of Countrywide is instructive at a time when there is considerable pressure to retreat from Enron-era reforms, with many claiming they are too costly and not necessary. On the contrary, Countrywide shows that improvement is far from universal when it comes to corporate governance and that, once again, excessive CEO pay is still the Typhoid Mary of the boardroom, showing up time and again just before calamity strikes, as it did with Enron, WorldCom, Tyco, Adelphia, Nortel, and more. It also shows that a single company’s misjudgments can carry profound consequences for other corporations, public institutions and a wider community of interests, which is why society itself has a considerable stake –separate and apart from that of shareholders– in seeing CEO pay returned to reasonable levels.

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