The Corporate Law Group

Corporate Governmentance?

We have watched with interest (and some horror) the uncharted waters into which our economy is swimming (sinking?). We now have one of the recently largest companies in the world bowing at the alter of government (OK, it bowed a long time ago, but now is being sacrificed). We speak of General Motors. After Enron, intense focus on corporate governance was the watchword; Sarbanes-Oxley the bible. Let’s make sure that the system of running our corporations was free of undue influence, based on the independence of the caretakers, and that all persons with any influence be properly vetted and approved. Shareholders are being given new powers of proposition and Boards are supposed to respond to them, not the managers. Well, we guess all that changes when the government is involved. We watched with open mouths as the POTUS fired the GM CEO. Wasn’t that the Board’s job? Did the Board abdicate its responsibilities? Was that a fiduciary breach? Doesn’t the Board select the CEO? Don’t the shareholders control things? BTW, the latest SEC filing as of this writing is an order granting confidential treatment concerning the government loan agreement, so we may never know whatever is really going on. The Buzz says playing in that sandbox is no good for your company or the country.
Paul Marotta

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