Bill George, Harvard professor, specialist in corporate leadership, author of the sentence that heads this post, is a Goldman Sachs director.
Under conditions of profound challenges at Goldman, he has so far set no tone at all because he has said and done absolutely nothing.
In an article in Bloomberg titled Goldman’s Silent Board, Richard Teitelbaum reviews the “storm of criticism, government investigations and an SEC suit” that continues to rage around Goldman, and notes that the bank’s “outside directors have failed to speak out.” As “regulatory and legal entanglements escalate — the firm’s nine outside directors, who aren’t Goldman employees, are keeping mum.” He quotes several informed observers, all of whom are amazed at “the board’s somnolence in the face of so much controversy.”
… The board members said nothing publicly, for instance, when on April 16 the U.S. Securities and Exchange Commission filed a civil suit alleging Goldman had committed fraud in underwriting and marketing a mortgage-related security called Abacus 2007-AC1 without disclosing to clients that a bearish hedge fund customer, Paulson & Co., was involved in creating it.
… Nell Minow, co-founder of the Portland, Maine-based Corporate Library, a governance research firm, says that when the SEC suit was filed, the outside directors should have immediately set up a committee to investigate, hired independent counsel and announced that they would make the results of their probe public.
The board should also have been riding herd on its members’ stock trades, says Cornell University Law School Professor Robert Hockett, who specializes in financial regulation from his office in Ithaca, New York. Goldman spokesman Lucas van Praag says directors are periodically informed of such trades. The bank received a Wells notice dated July 28, 2009, notifying the firm that it was the target of an SEC fraud investigation.
… “The outside directors haven’t been visible on any of this,” says Patrick McGurn, special counsel at RiskMetrics Group, a New York adviser to shareholders. “You have to ask if it’s setting the correct ethical tone.”…
Keep in mind that Leader Bill’s silence doesn’t come cheap. Like the other board members, he gets handed hundreds of thousands of dollars every year to keep his trap shut.
July 8th, 2010 at 12:38PM
Petard? Hoisted?
Bill George is a former Medtronic exec. Has made a lot of money from the ethical leadership racket.
July 31st, 2010 at 1:57PM
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