Corporate Boards Are the Culprits

The current economic mess is caused in great measure by the boards of directors of corporations. These boards are composed mostly of corporate officers of other companies, who often select their own boards from among the officers of the corporations on whose boards they sit.

This mutual support arrangement results in incredibly high salaries and retirement packages, stock options and other benefits. All the top executives have to do is plan short term to push the value of the stock as high as possible and then cash in their stock options, usually multimillion-dollar gains, and forget about the shareholders, employees and the companies themselves.

This behavior must stop in order to restore the confidence of investors and ensure stability in employee retirement funds. A good starting point would be a ban on stock options, perhaps replaced by profit sharing, and ensuring that the members of the boards of directors are independent and are not allowed to have on their own boards executives of the companies on whose boards they sit.

Marcel Gawartin

Ladera Heights