Commentary: Boards are real culprits in AIG mess (CNN/Nell Minow)

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By Nell Minow
Special to CNN

Editor's note: Nell Minow is editor and chairwoman of the Corporate Library, an independent research company, and was named one of the 20 most influential people in corporate governance by Directorship magazine and "the queen of good corporate governance" by BusinessWeek Online. She has co-written three books.

(CNN) -- The stories about the outrageous $160 million bonus payments at AIG have all omitted the most important names.

They are the members of AIG's Board of Directors Compensation Committee.

These people should have been on the hot seat before the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises, alongside CEO Ed Liddy. Although there is a lot of blame to go around, ultimately the buck stops -- or, I should say, the bucks should have stopped -- with them.

Why haven't we learned that it is the boards who are responsible for the massive failures of strategy and risk management at these companies? Regulators, journalists, securities analysts and investors routinely ignore the most obvious indicators of investment risk that are presented by bad boards of directors.

This is particularly obvious in the case of AIG, which has been a serial offender in corporate governance, especially in executive compensation.
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more: http://www.cnn.com/2009/POLITICS/03/20/minow.aig.board/index.html