The new book Money for Nothing goes deep inside the elite world of corporate leaders to reveal its inner workings and show how the glaring failures of the system have imperiled our economy. As authors John Gillespie and David Zweig—both Harvard MBAs with 30-plus years of Fortune 100 experience at investments and media companies—note, more than half of the world's 200 largest economies are not nations: They are corporations. The leaders of these behemoths exercise a remarkable degree of power over the health of our economy and on our individual financial security. Their failures of leadership, as portrayed in this book that have led to wave after wave of scandals.

In the most recent economic collapse, almost all attention has focused on the greed, recklessness or incompetence of CEOs rather than the negligence of many boards, who ought to be held equally, if not more, accountable because the CEOs theoretically work for them.

The first book ever written for general readers about what really happens in boardrooms, Money for Nothing exposes an interconnected, self-perpetuating system of corporate control that too often ignores the owners while squandering or siphoning off much of the earnings. It features:
  • Directors who are selected but never truly elected;
  • CEOs who control the agendas, information and perquisites for board members;
  • Compensation consultants who legitimize outrageous excess;
  • Corporate accountants and attorneys who see no evil;
  • Regulators who are asleep at the switch;
  • Apathetic institutional investors;
  • Cynical manipulation of votes;
  • Rampant conflicts of interest, and
  • Attempted reforms that are forestalled or circumvented using shareholders’ own money.
Telling a host of stories from leading companies, Gillespie and Zweig describe exactly how and why boards have become so dysfunctional—agreeing to exorbitant pay packages; failing to challenge CEOs’ risky business strategies, and walling themselves off from the input of shareholders. The authors conducted a remarkable set of interviews with current and former directors and upper echelon managers from many of the country’s largest companies—including General Motors, Bank of America, Microsoft, American Airlines, Bear Stearns, Countrywide, and Tenet Healthcare—as well as with consultants, investors, shareholder activists and government officials such as Eliot Spitzer, former Fannie Mae presiding director Ann Korologos, and even former Tyco CEO Dennis Kozlowski, who was interviewed in prison.

They examined, as well, the vast and fundamentally conflicted array of consultants, accountants, investment bankers, lawyers and others who collect hundreds of billions of shareholders' dollars, often to provide reputational camouflage to directors or shield them from accountability.

They also delved deeply into a wide range of fascinating behavioral, anthropological and economics research about this elite culture that shows how directors have come to be dominated by CEOs and to ignore the shareholders they are supposed to represent.

But Gillespie and Zweig don’t only highlight the failures. They also report on companies and directors that have succeeded at ensuring good governance, such as at Target and in the remarkable turnaround stories at Tyco International and Warnaco. And they offer a comprehensive set of recommendations about the reforms that are needed to transform boards into the highly effective advisors and watchdogs they should be.

Directors have been compared to “parsley on fish—decorative but useless.” If we cannot or do not wish to entrust government to safeguard our futures, boards will have to step up and do their jobs. Money for Nothing explains why that‘s so necessary and how it can be done.

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