When Elliot Spitzer and Hank Greenberg butted heads, AIG’s board had to make a decision – do we fight the good fight, close ranks and face this outside threat, or do we cave in and try to work a deal with Spitzer.
When Spitzer threatened an indictment of AIG the board no longer had a choice. No company has ever survived being indicted. The board bowed to the inevitable and caved, forcing out Greenberg as the price to get Spitzer to back off.
Now they’re finishing the process, revamping the board of directors so there’s more control at that level, more independent directors and more clear accountability.
Regardless of what Mr. Greenberg accomplished during his tenure, the board probably did what they had to do. Hank had to go and the board, led by Frank Zarb, had to take control. The interests of thousands of AIG employees and all of the other AIG stakeholders had to come before loyalty to Mr. Greenberg.
In the end, it’s an open question whether AIG is a better company with the new management team and the revitalized board than it was under Mr. Greenberg’s guidance. But AIG wasn’t going to survice unless the board caved.
When Elliot Spitzer and Hank Greenberg butted heads, AIG’s board had to make a decision – do we fight the good fight, close ranks and face this outside threat, or do we cave in and try to work a deal with Spitzer.
When Spitzer threatened an indictment of AIG the board no longer had a choice. No company has ever survived being indicted. The board bowed to the inevitable and caved, forcing out Greenberg as the price to get Spitzer to back off.
Now they’re finishing the process, revamping the board of directors so there’s more control at that level, more independent directors and more clear accountability.
Regardless of what Mr. Greenberg accomplished during his tenure, the board probably did what they had to do. Hank had to go and the board, led by Frank Zarb, had to take control. The interests of thousands of AIG employees and all of the other AIG stakeholders had to come before loyalty to Mr. Greenberg.
In the end, it’s an open question whether AIG is a better company with the new management team and the revitalized board than it was under Mr. Greenberg’s guidance. But AIG wasn’t going to survice unless the board caved.