May 17, 2006
Arthur Levitt, the former chair of the SEC, has redone the board of directors of American International Group (AIG) to clean up the company's image after CEO Hank Greenberg was forced out for manipulating the company's books. Of interest is Levitt's focus on charitable gifts. He notes that such gifts are "an item of seduction for boards that is far greater than almost any other perquisite..." AIG's new board rules prohibit board members from soliciting charitable contributions from the company. Interesting observation. But the rule will not work. When a board member's alma mater shows up and asks for cash (without any participation by the member), the board member will leave the room and the other board members will do the deed.
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