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Companies May Fail, But Directors Are In Demand - U. S.

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http://dealbook.blogs.nytimes.com/2010/09/14/companies-may-fail-but-directors-are-in-demand/?ref=business

For 16 years, Marshall A. Cohen served as a director of the American International Group, stepping down just months before the company’s near-collapse in 2008. Several months later, Mr. Cohen was again in demand, joining the board of Gleacher & Company, a New York investment bank.

Gleacher expanded its board last year to include not only Mr. Cohen but Henry S. Bienen, who served as a director of Bear Stearns from 2004 until its rescue by JPMorgan Chase in March 2008.

On the second anniversary of the Lehman Brothers bankruptcy, appointments like those of Mr. Cohen and Mr. Bienen highlight how the directors of the companies at the center of the financial crisis — A.I.G., Bear Stearns and Lehman itself — still play an active role in the governance of corporate America.

“In too many cases, the radioactivity of a board member of a collapsed company has a half life measured in milliseconds,” said John Gillespie, a longtime Wall Street investment banker and the co-author of “Money for Nothing” (Free Press), a recent book on corporate boards.

While in some cases investors are suing members of the boards of the failed companies, shareholder advocates have for the most part focused their energies on other issues. And public outrage over the financial crisis has been mainly focused on the executives in charge of firms like Bear and Lehman.

Some, like James E. Cayne of Bear, have not re-emerged at other companies. Richard S. Fuld Jr. of Lehman, which filed for bankruptcy on Sept. 15, 2008, is running a small advisory firm.

Yet the decisions that led to the collapse of the firms they steered were not theirs alone. Directors are elected by shareholders to oversee the activities of a company and play an important role in appointing senior officers and setting corporate strategy. In many cases during the real estate bubble, directors approved the strategy that paved the way for executives to make risky investments on borrowed money.

These directors also approved pay packages that fed the risk-taking.

“The C.E.O.’s get most of the attention because there’s so little expectation that the board should have done something,” Mr. Gillespie said. “In our corporate system the directors are supposed to be in charge, not the C.E.O., yet they rarely get any of the blame because they’re typically dominated by the C.E.O.”

It's like a huge club where it's difficult to get black balled, once you are in your in and performance doesn't matter because it if goes wrong it's always because of circumstances out of your control.

I bet the ones who haven't got jobs aren't short of a bob or two.

Being a director is a great job, performance related pay irrespective of performance and even when you fail other companies seek out your unique skills.

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I have come to the conclusion that higher management largely consists of highly paid liars.

Id have thought their unique contributions would have been seriously damaged now that the scammers secrets are shown on the telly, how they do it, and how to spot them.

cant think of its name, but theres porky the sleight of hand, and the 4ft blonde who does the girly distractions.

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"For 16 years, Marshall A. Cohen served as a director of the American International Group, stepping down just months before the company’s near-collapse in 2008. Several months later, Mr. Cohen was again in demand, joining the board of Gleacher & Company, a New York investment bank."

If you can figure out how to extract billions of dollars in free money from tax payers, don't you think your skills would be in demand?

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"For 16 years, Marshall A. Cohen served as a director of the American International Group, stepping down just months before the company’s near-collapse in 2008. Several months later, Mr. Cohen was again in demand, joining the board of Gleacher & Company, a New York investment bank."

If you can figure out how to extract billions of dollars in free money from tax payers, don't you think your skills would be in demand?

I just finished reading Barbarians At The Gate The Fall of RJR Nabisco.

Highly recommended. A cabal of fools, but they got away with it.

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Highly recommended. A cabal of fools, but they got away with it.

They are not incompetent, rather they (AIG) including it's directors were part of the fraud, hence why these guys are saught after- they know how the game works. I'm sure the directors got a lot of money out of AIG before handing it over ;)

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They are not incompetent, rather they (AIG) including it's directors were part of the fraud, hence why these guys are saught after- they know how the game works. I'm sure the directors got a lot of money out of AIG before handing it over ;)

When the chickens come home to roost, it won't be in their shed.

Edited by Tonkers

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  • 153 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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