If you remember, the General Motors board gave CEO Rick Wagoner a 64 percent pay raise — to $15.7 million — in 2007, when the company lost $38.7 billion. The company went bankrupt two years later at a cost of $52 billion to shareholders and another $13.4 billion to all taxpayers.
In Sword Tips, we’ve often remarked on the dismal job done by so many Boards of Directors, falling short of their fiduciary and ethical responsibilities and failing to hold the company’s leaders accountable for their performance as well as their conduct.
So, it’s no surprise that John Gillespie and David Zweig, have written “Money for Nothing”: How the Failure of Corporate Boards is Ruining American Business and Costing us Trillions”. You can find a review of the book here.
My advice? If you have no meaningful expectations from your Board, don’t have one. Keep grandma and your sister on your board. Have a nice dinner, some wine and keep telling each other how wonderful you are. When you wake up one morning and discover that your business is in the tank, you won’t need to call them on it. Just stay in front of the mirror a little longer.