Harvard University professor Bill George boasts of his seat on the board of directors of Goldman Sachs, and lectures the world on “character-based leadership.” What has he done at GS?

One wonders how much louder the alarm must ring before the drowsy Goldman board stirs. Last week, a judge’s description of Blankfein’s apparent role in persuading its client El Paso Corporation to work with Goldman in a conflicted situation was top news. The week before, Goldman reported that the SEC is looking into client disclosure issues, an alleged continuing problem at the firm…

Others much further from Goldman’s epicenter have heard the alarm, so where is the bank’s board in all of this? …

Is the SEC at all relevant to Blankfein and Goldman’s board? Blankfein and Cohn did not mention the recent headlines or scrapes with the SEC in the memo to employees. Last month, SEC Chair Mary Schapiro described the need to continuously police these kinds of firms — and yesterday, Propublica traced Goldman’s troubled regulatory history over the last 12 years. With all of these troubling instances, the current board has had several opportunities to awaken and act.

The board failed to seize a big opportunity last year when it oversaw the bank’s Business Practice Review amid the fallout surrounding the company’s role in the financial crisis. That inadequate 67-page document was big on platitudes but small on substance in addressing the ethical conundrums employees face. Goldman told the Times yesterday that client success mattered to the firm. But in the instance in which you are selling what you call junk, does only the seller’s success matter and not the buyer’s?

… The board missed another opportunity yesterday. Instead of brushing off Smith’s comments, the board should have ensured that the CEO took the allegations seriously. It should have used this opportunity to communicate to employees and others that it would move to understand what actions would make all employees and stakeholders comfortable that Goldman’s deeds match their words.

Instead, the board allowed Blankfein and Cohn to take the tact most likely to shut down future whistleblowers: reject Smith’s comments as out of hand. If they are willing to do this in public, what goes on behind closed doors?

The board itself should be taking action. It’s serious when your CEO has been publicly called out by both a judge and an employee in a two-week timeframe.

And shouldn’t it be a wake-up call when stakeholders mock the employee whistleblower for being naïve, implying that everyone should know that Goldman is as bad as Smith made it sound?

… Blankfein has been on the Goldman board for nine years and some Goldman directors have served terms ranging from seven to 13 years. Are some too embedded? Where have their hearts and minds been? Hello, Goldman board. Are you awake?

To be fair, Bill has done some things on behalf of Goldman Sachs. Here he is defending tens of millions in personal compensation for GS executives:

Goldman Sachs board member and Harvard professor Bill George defended the firm’s massive bonuses and compared employees’ compensation to that of professional athletes and movie stars during a recent interview.

In an interview posted Dec. 23, 2009, George told the ideas web site Big Think “I think that one feels like the shareholder value is made up in people and you need the people there to do the job and if you don’t pay them for their performance you’ll lose them and it’s much like professional athletes and movie stars I think.”

Well, they’re sure movie stars now. Spotlight couldn’t be any more intense right now.