In his article (“Breach of Trust: Leadership in a Market Economy,” Fall 2003), Roger Leeds regurgitates facts surrounding the problem of corporate governance with US corporations. Leeds fails to bring any new viewpoint or insight into the issue, repeating ideas from newspapers and talking heads. The article also does not bring up critical details regarding the cause and continuation of corporate corruption, of which I will explain below.

There have been no published requirements or selection criteria for members on boards of directors. Unavailability of this critical information has blindsided stockholders and the general public as to the duties and responsibilities of directors of corporations. In short, stockholders have been eliminated from exercising their oversight responsibilities and from participating in the governance of their corporations.

Additionally, the corporate governance issue has been a longstanding problem in the United States. When I compare previous major cases, including the Franklin National Bank case in the 1970s and the National Medical Enterprise case in the 1990s, with current cases such as Enron, the common thread is that all of them involved privileged board members. These members deceived and stole from everyone by using the same unethical and unlawful methods and techniques. In every case, the board of directors caused the failure of the corporation, resulting in lost jobs and personal investments.

Furthermore, isn’t it a clear case of conflict of interests when a manager and the overseer of a corporation are the same person? Corporate managers and directors serve different capacities and thus should never serve in both positions. Management is responsible for running the day-to-day operations of corporations and preparing a long-range plan to ensure that corporations will continue to be competitive. Directors are responsible for overseeing the operations of corporations and ensuring that assets of the corporations’ owners—that is, stockholders—are protected from fraud, waste, and abuse. However, in many corporations, individuals who have ties to corporate management fill directors’ positions. They are current or former Chief Executive Officers (CEOs) who have been exchanging favors for each other, law firm and accounting firm partners who have had business relationships with such CEOs, college professors who have done studies for corporations, and ex-high ranking government officials who have useful connections. These people with intertwined relationships with corporate management often sit on multiple boards, causing an even greater conflict of interest.

The SEC, various CEOS, and political proponents of the 2002 Sarbanes-Oxley Act selected the current members on the Public Company Accounting Oversight Board. These members have thrived in this non-transparent system and have done nothing to correct this systemic problem. How can the problem-makers work to end corporate corruption? To secure a healthy US economy, free from corporate corruption, we must have a transparent corporate governance system that prevents management, consultants, advisers, and influence peddlers from sitting on boards of directors.