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.
The corporate governance blog of Harvard Law School now includes Finlay ON Governance on its blogroll. The Harvard Law blog reflects some of the best scholarly thinking in the field. It follows in the tradition of the late Professor Myles L. Mace, one of the pioneers in the evolution of modern boardroom practices and the author of the seminal work Directors: Myth and Reality. Thirty-six years after its publication, it remains must reading for any serious boardroom player today.
The Harvard link is a much appreciated honor as Finlay ON Governance enters our second year.
I have a guest post on the corporate governance blog of Harvard Law School. This is an interesting site where you can find the thoughts of some of the leading legal scholars in the field. It often prompts some lively (or what passes for same on the part of lawyers) exchanges on corporate governance and CEO pay matters from students, faculty and prominent figures in the legal community.
Here are a couple of excerpts from my post: (more…)