Author John Gillespie on the failure of corporate boards and how it has cost Americans trillians of dollars

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A Bank of America director questioned the CEO’s $76 million pay package in a year when the bank laid off 12,600 workers. She was dropped from the board a few months later. The General Motors board gave its CEO a 64 percent raise in 2007, the same year the company took $39 billion in losses. In his book Money for Nothing, author John Gillespie chronicles these and other corporate excesses. But he places the blame on the shoulders of elite but dysfunctional boards that fail to reign in corporate leadership. He argues that this is the true source of the recession and, that if we don’t reform corporate governance, another economic catastrophe is inevitable.

(He was a guest on this morning's local public radio program - Air Talk with Larry Mantle. It's not yet available on podcast.)

The book, co-authored with David Zweig, explores the weakest yet most important link in our capitalist system. According to the authors, corporate boards have been commandeered by CEO interests and lack of perspective. The author/insiders reveal how this shifting relationship, where a group of elites seemingly elected by everyone but accountable to no one, has literally brought us to the brink of ruin.

“Directors are supposed to be the conscience of corporations, our voices in the boardroom, but they have presided over the decline of entire industries, the alienation of investors, excessive payouts, the corruption of government, loss of faith in the American dream, and a falling standard of living for everyone, save those at the very top,” said Gillespie.

“At last someone turns the spotlight on the most overlooked element of the financial meltdown – the boards of directors. With an unerring eye for details and the structural and personal failures they reveal, the authors fill this book with insight about the failures of directors and what it takes to make things work,” Nell Minow, Editor and Co-Founder of The Corporate Library, co-author of “Corporate Governance.”

With almost two decades of experience as an investment banker at some of America’s top financial institutions, including Lehman Brothers, Morgan Stanley and Bear Sterns, as well as his recent position as CFO at a national human services company, Gillespie is considered a “blue chip capitalist insider.” He is a graduate of Harvard College and Harvard Business School.

http://www.massinc.org/Press-Room/MassINC-...-Gillespie.aspx

[Texanadian 10]

I always find it sneaky when the CEO is also the chairman of the board.

[Ali G. 37]

You commie #######... Interesting read, I will have to add it to my list.

Is this really a surprise to anyone? It's just a shame that the good honest folks that vote for republicans cannot connect the dots and realize this 2010 reality regarding the private sector. It is time people wake up and smell the coffee that these boards have sold the country out for their own personal gain. They neither have any shame nor do they care about their decisions long-term effect and impact on America. Through their actions alone, Middle Americans who once prospered are now in the poor house again. I have been on here for a while and for the first few years after I moved here, was as republican as it gets. I erroneously assumed that the Repub party was the equivalent of the conservatives back in Aus. Unfortunately this couldn't be furthest from the truth. We used the private sector to build our country; we certainly never stood by and allowed it to exploit the country right under our eyes. What we need is some of China's corporate laws, where selling out your country for money is an act of treason and punishable by death. Such 'scandals' is why I would never buy the libertarian 'approach' of less regulation is better and actually hope for the opposite.

My good friend on here, none other than lone ranger, once said that the preamble is not law, therefore, pretty much irrelevant; I strongly disagree. The words being at the start of it and three times the size of the rest clearly indicate their extreme importance. Therefore, when and did personal wealth and the private sector overtake the interests of 'we the people '?