One might think that in a company that lost $100 billion over the past year and required three taxpayer bailouts totaling $175 billion, its directors would have moved heaven and earth to avoid this kind of reputation-stinging disaster. As it is, there is little evidence that anyone has even turned on the lights in the boardroom.
It’s spring training once more for the AIG Dodgers, otherwise known as the board of directors of the giant insurance company. Their full-time occupation seems to be dodging responsibility for what is happening in the company and avoiding taking charge of its governance.
The most recent episode is the $165 million in bonuses for members of the company’s Financial Products Group, which was behind the bad derivatives deals that brought AIG to the edge of collapse.
The bonus fiasco has promoted a cascade of outrage around the world, but, once again, it appears that the company’s directors prefer to have fingers pointed everywhere but at them. What did they know about it? What was their role? Did they approve the bonuses? If so, those who were on the board at the time should be asked to leave, as we have suggested before this latest scandal. If they did not, what kind of governance system does this company have? Does it have one at all? One might think -but maybe this is just a seventh inning stretch- that in a company that lost $100 billion over the past year and required three taxpayer bailouts totaling $175 billion, its directors would have moved heaven and earth to avoid this kind of reputation-stinging disaster. As it is, there is little evidence that anyone has even turned on the lights in the boardroom.
The same questions need to be asked about the billions in public funds that have been funneled to giant banks, including several on Wall Street, that have received TARP money.
AIG may or may not be insolvent. But there is little doubt that its board of directors is completely bankrupt.