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John Gillespie is -- investment banker for entertainers at Lehman Brothers Morgan Stanley Bear Stearns.
The civil and nationwide healthcare company.
David Zweig has sort of a time -- Dow Jones and co founded salon dot com they're both written.
A book entitled to money for nothing -- the failure of corporate boards ruining American business.
Costing us trillions.
Of dollars good morning to -- him.
Mourning -- while -- and a -- the best eyes and I'm -- soul all.
Not having to benefit of leave an opening in the book the -- and I think it's a mystery we've we've run one or who don't know tell me about it wanted to.
Do it's it's a story of how shareholders.
How we -- these companies when we actually -- the companies in the United States -- all of focuses on in the CEO this and that but actually have a system.
Whereby we elect people to represent us and basically.
Oversee what the CEO should be doing and -- boards of directors that.
And over lawyers most of -- -- reluctant shareholders elect an anomaly but in reality it you know it makes Washington look fair -- -- it's actually done.
And so also done how -- it done.
So they select themselves is there's this -- happens and there's no.
One former SEC commissioner for two -- a Soviet style election you can vote for the murder of Spain.
Some shares of series.
-- much -- yesterday if I wanted to.
Well and it -- notify me -- to do know before they send these proxy forms and two thirds of shareholders toss them out.
Because there are -- the -- yeah well it's -- what does academics call rational apathy there's no.
Good reason for you to vote because it's a rather meaningless vote what moment to moment that your success -- -- -- by the trust -- sort communism and I've got -- -- -- -- -- -- yet.
They they basically there's cuts say six slots open they -- of the six people ought to be they name the six people.
And then you can't vote against them so you can with older vote so if they get one vote in six billion withholds they get elected.
And that's just how it operates -- or can you -- very easily nominated.
The problem is it that it's a completely under the first group only one out of seven are women.
85% or are worried they're all wealthy and had come from the same background so they don't even realize that they're not representing.
Point of view within the salt are all and all -- all bad guys know how meltdown affect -- or decent intelligent experienced people but the trouble is that when they go into the boardroom it becomes kind of -- Bermuda Triangle where they.
Moral compass in some cases they they.
Lose their -- ago lost in there and and stop representing your one of his guys on.
I've never been a board member all -- -- it is Ramadan.
And I was just chief financial officer was critical launched its its good close enough to Davidson.
-- business experience and having going to.
Business school gave us a little bit of -- view that we thought would help.
If we took a couple years off and talk to people who were board members.
Give some examples to people about why the system is really or talk -- -- -- while Spain.
And -- bloggers -- monitor for nothing.
Published our friends over at stone Simon -- was publishers to all my wife books exactly budget Germany.
Well we were in -- -- school together in.
John -- -- I don't went to Harvard or -- dead and John was brilliant because we paid to go to school he never really showed up.
The he was -- the dog he was always handicapping can play action here are wrong I was trying to get a -- I was trying to get -- board membership did happen.
Liberal -- Harvard.
And we just been friends ever since and he's.
Fine writer -- -- all around good guy never loses a horse track.
-- so while we're it was overuse of reason but they do they got on the board -- -- the board room is suddenly holders all there.
-- focus on.
Stockholders and I do want him with a -- the problem the biggest problem is they're beholden to the CEO.
Brought them a border certainly proved -- appointments the CEO -- all there.
Committee assignments most of the information.
And they're in a position where pretty much all they can do other than possibly discuss things is its practice -- rubber stamp.
And too many boards do there are good ones are other great companies but the problem is.
Idea in general ward is one that is not acting as a monitor.
Or as an advisor properly for shareholders and therefore shareholders aren't aren't getting things get.
What are most -- -- general interest of America I like like -- commerce and Frontline is short.
And his interest is and he served us for ever.
All -- suspicious shareholder.
And and it wasn't just lip service for example one time he calls and you Sosa -- like -- Our solar great but -- a lot of money and do you have ruptured gas shortages a corporate point.
Then he shows I don't frustration moments ago from flooded out of Florida should -- out of Florida answered my grandmother or whatever -- those.
I punched him but they have the most -- -- to run.
-- -- most of them seem to forget.
We all seem to forget that when -- -- the corporate -- your use and other people's money you know and and that's that's the bottom line and was uninteresting.
A couple of years ago the SEC -- required that it's corporations disclose what was going on these planes and in some of the folks.
The database about golf handicaps and where they were fine and matched up when they're playing golf and where where they're playing golf and with that.
And that act disclosure really cleaned up a lot of behavior that should have been happening now it's those kind of interest -- That the real problem is -- CEOs after awhile most of them and board members get into a bubble.
Where they just don't realize that some what they're doing doesn't serve the shareholders shareholders don't have a way to.
Make them accountable -- to find out what they're doing because they're behind closed doors.
And the system.
Circling back into a boom and bust and -- we are our concern is it is getting to be the situation where we can have.
Even more devastating when we to slip through our aren't most cereals and all the -- border and well that doesn't that not only are they beholden and there -- of the board sort of beholden to them -- in the 500 largest companies in the country.
Of the CEOs are the chairman of the board also walk another 18%.
Where the former CEOs so.
They're really in control there's no real means of the shareholders having.
Representation there about how their money's --
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