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The AAO Weblog covers accounting issues and current events as they relate the practice of investment analysis. All posts prior to September, 2007 are in the public domain, but after September 4, only subscribers to The Analyst's Accounting Observer will see all posts going forward. Only selected, occasional posts will be released to the public domain from September 4 forward.

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HP's Board: A View From Way, Way Back
Location: BlogsAAO Weblog (Public)    
Posted by: Jack Ciesielski 9/22/2006 5:40 AM
No sense wasting more pixels on the H-P mess, even though I'm kind of thankful that it came along. Now there's a diffferent monotone drone in the news to replace backdating stories.

You just can't top the H-P story for sheer boardroom weirdness, though, even though the backdating stories suggest that there wasn't the most rigor being applied to compensation issues. Even dead guys could get backdated options. (If you don't think that spying on board members and trying to plant moles in newsrooms is weird, try out the story on Patricia Dunn being voted into the Bay Area Business Hall of Fame for leadership.)

You can argue about effective boards, sloppy boards, selfish boards, and good boards. One question is worth asking: why bother with boards anyway? How did the board system come about? Is it relevant today?

(Do boards care about accounting? Never mind.)

Back to the point. Justin Fox poses the questions above (but not the one about accounting) in his thoughtful article "Who Needs A Board Of Directors, Anyway?" in his blog Fortune magazine blog. It's a good read: I enjoyed his brief history of the board structure. And though we're stuck with it (didn't mean to spoil the ending for you, but you probably guessed it anyway), it's good to know how we got to where we are. And check out Justin's own blog at by Justin Fox. As he puts it, it's shameless self-promotion of his forthcoming book, "The Myth of the Rational Investor." But if it's by Justin, it ought to be worth reading.
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