AMERICA'S CAPTAINS of industry have met the enemy, and it is too many of their peers.
Not a day passes without revelations of corporate malfeasance or outright criminality, profoundly shaking the world's confidence in U.S. financial markets and directly affecting millions of Americans through job, stock or pension losses. Enron, Global Crossing, Tyco, now WorldCom - the list of disgraced giants grows.
As the comic strip Doonesbury noted this week: "The business section does look like the crime page these days."
Hindsight - particularly if colored by a hangover from a money binge like that of the 1990s - has a wonderful way of bringing wretched excess into sharp focus. But when the green is flowing from what appears to be a perpetual cash machine, intoxication stifles tough questions. Remember, just a short time ago there was giddy talk of a paradigm shift in the U.S. economy, one that not only benefited Wall Street's masters of the universe, but anyone with a home computer.
Among the biggest beneficiaries of the '90s money culture were the business media, which variously cast the big-name CEOs as combined emperors, rock stars and philosophers for a new era.
Intel's and Amazon's chiefs each ended up on Time magazine covers named as the person of the year. Jack Welch, General Electric's former boss, was lionized as a Moses possessing wisdom that transcended merely running a mega-enterprise. Even Joey Ramone, the late stock-market addict and lead singer for the punk group, the Ramones, recorded a tune in praise of the reassurances of Maria Bartiromo, the cable TV business anchor.
But for all the attention, no one bothered to ask in too many cases: Who's minding the store?
The short answer: The buck is supposed to stop with the directors on corporate boards - a fiduciary duty that increasingly has been neglected as board members have come to be selected and essentially held captive by corporate managers. Too many have been involved financially with the companies they're overseeing. Too many have just been collecting checks for showing up at meaningless board meetings.
To be sure, ending the spreading economic crisis provoked by corporate wrongdoing will involve multiple lines of attack: Congress should defy strong industry opposition to pass Maryland Sen. Paul S. Sarbanes' bill to more independently regulate accountants. The Securities and Exchange Commission should tighten and more aggressively enforce its accounting rules. But addressing the core issue of restoring trust in corporate governance must involve the board of the New York Stock Exchange, in a vote scheduled for Aug. 1, passing new standards aimed at strengthening company boards - particularly by requiring a majority of independent directors. Other stock exchanges should follow suit with similar rules.
"Greed is good," said the fictional Gordon Gekko, in the prescient 1987 movie, Wall Street. And for many - despite the heady boom of the '90s money culture and its painful crash during the last year or so - this is probably still the credo. But that only works if greed is corralled by rigorous and independent oversight. This is the only way that credibility - and health - can be restored to U.S. financial markets and the economy.