The board of directors of American International Group Inc., which is under investigation by state and federal authorities for certain accounting and reinsurance practices, has elevated public policy concerns and added outside directors in a reworking of its organizational chart.
The board has established two new committees, reconstituted its Executive Committee, and elected two new outside directors.
In March, the board pressured President and CEO Maurice Greenberg to step down. Two weeks later, Greenberg also retired as chairman and Frank Zarb was named interim chairman.
Now, the board has endorsed the formation of two new governance bodies: the Regulatory, Compliance and Legal Committee, and the Public Policy and Social Responsibility Committee.
In addition, the board has reconstituted its Executive Committee. Martin Sullivan, AIG president and CEO, will serve as chairman of the Executive Committee. Also serving on the Executive Committee will be Donald Kanak, AIG executive vice chairman and COO; Frank Hoenemeyer, the chairman of the Audit Committee; M. Bernard Aidinoff, chairman of the Nominating and Corporate Governance Committee and Marshall Cohen, chairman of the Compensation Committee.
Zarb will be interim chairman of the board and Lead Director but he will no longer be chairman of the Executive Committee of the board under the new structure. He will serve as an ex officio member of all the committees of the AIG board, including its Executive Committee. Zarb has been a member of the board since February 2001, and he was the chairman of the Executive Committee of the board from April 2002 until this change.
In addition, the board has elected George Miles, Jr. and Morris Offit as directors.
Miles is president and CEO of WQED Multimedia, the public broadcaster in southwestern Pennsylvania. He joined the organization in 1994 after serving for 10 years as executive vice president and COO of WNET/Thirteen in New York. Prior to that, he held executive positions at KDKA, Pittsburgh; WPCQ, Charlotte; the Westinghouse Television Group; and WBZ-TV, Boston. Miles is a Certified Public Accountant and earlier in his career was a contract auditor at the U.S. Department of Defense and a manager at Touche Ross & Co.
He is on the Board of Directors of WESCO International Inc.; Equitable Resources, Inc.; Harley Davidson Inc.; the University of Pittsburgh and the UPMC Health System. He is the former chairman of the Association for America’s Public Television Stations and the Urban League of Pittsburgh Inc.
Offit is the co-chief executive officer of Offit Hall Capital Management LLC, a wealth management advisory firm in New York and San Francisco. He was previously founder and CEO of OFFITBANK, a private bank that merged into Wachovia Bank in 1999. Prior to that, he was president, Julius Baer Securities, and a general partner at Salomon Brothers. He began his career at the Mercantile Safe Deposit and Trust Co., Baltimore.
Offit is a trustee of The Johns Hopkins University where he served as chairman of the Board. He is currently president, UJA-Federation of New York, where he was also a former chairman of the Board. Offit was designated one of the country’s first Chartered Financial Analysts and he served as the first chairman of the Professional Ethics Committee for the Financial Analysts Federation.
Commenting on the governance changes, Zarb said, “AIG’s board of directors and its new management team have been taking decisive action to resolve regulatory issues, enhance transparency and improve corporate governance. The creation of two new committees of the board to focus on the important issues of regulation, compliance, legal matters, public policy and social responsibility is a significant positive step, as is the election to the board today of two additional experienced and independent directors. Now, more than two-thirds of AIG’s directors are outsiders.”
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