Wall Street: Capitol of Greed or Builder of Capital?

The virtual loss in 2008 of the large investment bankers on Wall Street was shocking. The forced sale of Bear Stearns, the bankruptcy of Lehman, the controversial sale of Merrill Lynch and the changes at Goldman Sachs and Morgan Stanley have rocked the world.

This program addresses several areas that led to our system almost going down:

– Where were mistakes made and by whom? What changes are needed and by whom?
– What is the current mood of investors and how do they feel about corporate performance?
– What about Madoff, Stanford and other frauds?

Panelists Include:

• Max D. Hopper: Founder, Max D. Hopper Associates
• Robert J. Potter: President, R.J. Potter Company
• Shad Rowe: President, Investors for Director, Accountability Foundation

Dennis McCuistion starts by chronicling the above, “our nation’s source of building capital has instead become merely the capitol of greed.” He follows the statement by asking Shad Rowe why he is so angry.

Shad replies,

“I don’t look that angry. But I am angry at what’s happening in corporate America. Our system almost went down the drain. Why? The real cause in my opinion is that corporate boards are not representing owners, not thinking like owners and are allowing chief executives to make ‘heads’ I win; ‘tails’ shareholders lose, bets that have jeopardized our system.

Shareholders are directly represented by their corporate directors. It’s the law, but it’s not conventional wisdom and… it needs to become so, so we can preserve and enhance our system … Ownership is the litmus test. Private companies treated money like it was their own money. Directors are the legal representatives of shareholders!”

Bob Potter adds,

“Directors are absolutely responsive/responsible to stockholders. In the companies I serve as director, we have created incentive plans to management that are tied to stockholder performance. Some companies have allowed management to not act in the best interests of shareholders. We see excessive salaries, for instance. But they were approved by the compensation committee.”

Max Hopper says,

“Most corporate board directors really do represent shareholders. But some companies have gotten so big, that directors can not get their arms around what’s going on within the companies themselves. Too large a growth may be detrimental to their shareholders.”

All agree that more stringent rules need to be applied and that directors must act in the best interests of the shareholders. They also state that most companies are in fact doing their best to do so, yet we hear the bad news, not the good. Tune in for lively, straightforward talk about greed and Wall Street and what needs to happen to preserve capitalism.

As always we’ve been talking about things that matter with people who care. Thanks for joining us.

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Niki Nicastro McCuistion
Executive Producer/ producer

And a special thank you to the Institute for Excellence in Corporate Governance, University of Texas at Dallas, School of Management, (http://som.utdallas.edu/iecg/) for providing the guests for this 4 part series on Corporate Governance.

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12.27.09 – 1810