Another interesting O'Neill revelation

[priller]

There's a chapter in the book I haven't seen quoted or discussed yet. It's about how the White House responded to the Enron scandal. What's interesting is that O'Neill and Alan Greenspan wanted to fundamentally change the standard of measure that CEO's should be held to. He quotes at length from a long internal memo that Greenspan wrote where he says that corporate governance is essentially broken and needs a major fix. O'Neill says, "I wish people could see this side of Greenspan", and I was thinking, me too!

In later cabinet meetings, O'Neill tries to convince people that the standard of measure for CEO's needs to be changed from "recklessness" -- which is practically impossible to prove except in the very worst cases, and even then it's very hard (think Ken Lay). Because the CEO's can always say, "Geez, I didn't know!" So he wanted the standard to be "negligence". That would remove the know-nothing dodge. If a CEO claimed he didn't know all the crooked stuff was going on, then he *should have* known, and would be negligent.

After sending off his recommendations to the Chimp, O'Neill gave a talk to the heads of the top 25 financial corporations. Needless to say, they didn't want to have anything to do with O'Neill's new standard, all saying it would simply lead to more lawsuits. After that they burned up the phone lines at the White House.

Also unsurprisingly, Chimp and Cheney (and probably Larry Lindsay and Harvey Pitt) gutted or eliminated most of O'Neill's suggestions. The loudly trumpted corporate governance laws they passed were a pale shadow of what O'Neill and Greenspan wanted.

[Indiana_Dem]

1. I'm just starting in on the first chapter

where Greenspan and O'Neill are talking on the phone soon after he just got the job. They are talking about how they might have a chance to reform Social Security and Medicare like they had talked about.

[lovedems]

2. And the idiot * thought that the corruption by CEO's was the SEC's

fault for "over reaching". O'Neill could hardly believe what he was hearing. O'Neill and Greenspan thought this was a once in generation chance to make a difference. The meeting you refer to with the top 25 corporations, one CEO said that he would rather resign then know everything that was going on in his company. O'Neill stated that he wouldn't invest in that company. Eventually the "do nothing" crowd in the WH won.

[DBoon]

3. Resign rather than know everything that's going on?

And that bastard makes how much money as CEO?

No line manager would ever get away with that excuse.

[lovedems]

4. Yep, it's in the book. O'Neill was a successful CEO who took pride

in every aspect of his company. He would walk the floors regularly to talk to his employees and find out if they liked their jobs and generally how things were going.

He was VERY disgusted at the CEO's outrage at his ideas to correct the corruption problem.

[formactv]

5. I have read up to Sept. 11

This book is like nothing I have ever seen- reminds me of Seven Days in May because it is based on the careful daily notes of Paul O'Neill. Not much room for a mistaken memory. Read this book. Help put it on the bestseller list.

[Valjean]

6. Navy model

I think that CEOs should be held to the same standards of a Navy Vessel. They are the captain of the ship. They are PRESUMED responsible for ships conduct since they are in charge of discipline (hiring and firing).

If something goes wrong and there is a corporate crime, the CEO should have to PROVE that he took appropriate steps to make sure a crime wasn't committed.