In Frank Rich's column today in the NYT, he makes the point that there is no clear separation between Wall Street and Main Street but rather that there is constant interaction.
He cites for example the interchangeable Boards of Directors. North Carolinian Erskine Bowles, of all people, serves on the Boards of both Morgan Stanley and GM. John Bryan is on the Boards of both GM and Goldman Sachs. And so on.
Do these Boards actually do anything? Or are they for show and rubber stamping? They make huge amounts of money, I know that. (Af-Pk diplomatRichard Holbrooke was on the AIG Board until recently and earned hundreds of thousands of dollars, for which we obviously didn't get our money's worth. That's how out of power diplomats are paid, I guess, for just waiting around for their next diplomatic assignment.)
Since the CEO of the company often chairs the Board of Directors, he has the monopoly on all the power, it would seem, except when the Board rebels against him or her, which isn't often. But since these companies are supposedly 'owned' by the shareholders, where is the real control and check on CEO power? Shareholder ownership is a bit of a joke, I would say.
It seems to me that there needs to be a fundamental rethinking and reform of corporate governance in this country, as well as government regulation. Unfortunately, these people in power on the corporate Boards have also bought off many of the politicians with huge political contributions and 'payment' for speeches (see Larry Summers' recent income in post below). So who exactly is going to do the reform?
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