Jan10Written by:Sourabh Hajela
1/10/2008 9:04 AM 
CEOs serve as Chairman of the board. An American tradition fraught with potential for mischief
I have often read the “in the interests of national security” argument with interest, amusement and yes, a healthy dose of cynicism. Government officials often use it to prevent disclosure of information. As subsequent revelations prove, more often than not, someone is hiding something that can get them in trouble. This is the single most potent tool used by Governments across the globe use to shield themselves from wrongdoing.
The question is not with the argument – it is in the interest of the scum bag to use this argument – but with governance that allows it to stand. Who is the arbiter of which information is a national secret? Why should we – the stakeholders in the “nation” - take the argument from someone who obviously has a vested interest in hiding that information?
This problem, unfortunately, does not stop at the door of governments in “democracies.” It permeates the culture – every aspect of that society’s existence. Business, you see, is not conducted in a vacuum. So forms of the same argument are used in business – various privileges used by corporate “evil doers” to defraud their stakeholders – the shareholders of companies.
Here again, the same question must be asked: who is guarding the henhouse? The short answer: the fox itself!
This ludicrous practice of CEO serving as the Chairman of the board is as American as the apple pie. We accept it without much thought because it is ingrained in our tradition. How can the person who is being “managed” be the head of the people managing him/her?
We also accept things because we want to believe that people are fundamentally good and will do the “right thing,” not realizing that people, always do the right things except for the odd instance where the “right thing” is to further their own interests! Enron et al. are those instances.
It is time shareholders asked – no, demanded – that CEOs do not serve as Chairman of the Board and stop hiring friends and family as board members. Then and only then can we be assured that our “trust is verified.”
