Recent shareholder meetings at Citigroup and the Bank of America devolved into morality plays—wronged shareholders berated executives, executives apologetically vowed to improve—with a rather curious epilogue: every member of the board of directors was reelected. The reason is that corporate boards are often filled with under-informed, over-paid yes-men who rarely pay any consequences for bungles, James Surowiecki explains in the New Yorker.
Reform that includes new regulations, more independent directors, and greater diversity hasn’t helped. Shareholders have little say in director nominations, independent directors sometimes lack experience, and too often celebrity dominates (Tommy Franks is a BofA director). Worse, board members are part-time employees. “If the last few years have shown anything, it’s that protecting shareholder interests is a full-time job," notes Surowiecki.