Money for Nothing: How the Failure of Corporate Boards Is Ruining American Business and Costing Us Trillions

by David Zweig and John Gillespie

Book Overview

The world of CEOs and boards has become an entitled insiders' club--virtually free of accountability--and the abject failure of our corporate leaders to police themselves is costing Americans... This description may be from another edition of this product.

• Format: Hardcover
• Language: English
• ISBN: 1416559930
• ISBN13: 9781416559931
• Release Date: January 2010
• Publisher: Free Press
• Length: 306 Pages
• Weight: 1.10 lbs.
• Dimensions: 1.2" x 6.6" x 9.3"

Customer Reviews

I bought one for a friend, too

I liked this book so much that I ordered one to give to somebody else. "Like" may not be the right word because the subject is so serious. For well over a year we've all been dodging falling businesses or helping to shore up teetering ones. We've all heard about the ridiculous pay and bonuses too many of those companies gave or tried to give their executives. What we haven't heard enough about until now is how the boards of directors of too many corporations have been fiddling around with golf while the businesses they are supposed to be nurturing are crashing and burning. The authors bring some brightly shining lights into the boardroom so those of use who aren't so privileged can see clearly as the director mice scramble. It's very informative and very entertaining. There are practical steps such as enforcing current laws and making some new ones to enforce shareholders' rights. I like the Appendix where you can find links to organizations and descriptions of what what they do.

Timely, shocking, inspirational

"Of the world's two hundred largest economies, more than half are corporations." (p. 18) So when corporations go wrong, everyone suffers. "Money For Nothing" dissects what may be the weakest link within too many corporations -- an incestuous and beholden board of directors. Gillespie and Zweig expose insulting attitudes of CEOs, shocking negligence by directors, and a disturbing lack of internal and external curbs on bad behavior. For instance, one director was kicked off the board for saying the CEO's huge compensation at a failing company was a PR problem which needed to be considered by the board. (pp.110-111) They contrast the horror stories with some of praiseworthy corporate governance and suggest over two dozen ways to help cure the situation. They name names and kick some very deserving butt. The book is VERY readable. [...]. After you read the book, the website also has links to organizations which are trying to correct problems.

Fix the Boards - Fix the System

Money for Nothing: How the Failure of Corporate Boards Is Ruining American Business and Costing Us Trillions by John Gillespie and David Zweig begins with a story familiar to just about everyone on the globe -- corporate and economic collapse brought on by greedy CEOs. The authors look behind the headlines to reveal and document the systematic failure of corporate boards who are supposed to look out for shareowner interests but are still too often picked by the very ones they are supposed to advise and monitor... the CEOs. They discuss how companies spend enormous sums of shareholder money to fight off reforms, either directly or through organizations like the US Chamber of Commerce or the Business Roundtable. According to the authors, "corporate boards remain the weakest link in our free enterprise system." A brief overview is provided on how we got here and what it means for shareowners and society. Much of the book is given over to example after example of conflicts of interest, overlapping boards, and a world driven by the greed and status needs of CEOs. Studies have shown that 80% of acquisitions fail to deliver and many fail outright. Too often they are driven by incentives that reward empire building over the generation of profits. Jennifer Lerner, the only psychologist on the faculty of Harvard's Kennedy School of Government, finds that "Americans tend to exhibit anger more readily than those in many other cultures, and the effects of being in power closely resemble those of being angry." CEOs and other executives, it turns out, have substantially larger appetites for risk and are more optimistic about outcomes. Changing the context can improve outcomes, especially where the environment demands "predecisional accountability to an audience with unknown views." In the case of corporations, that would be a diverse independent board, not predictable lapdogs of management. Later chapters review "The Myth of Shareholders' Rights" and other issues, including proxy mechanics that allow moving shares to be voted multiple times based on the "day of record," when large blocks of stocks may be most likely to have several different owners. They document that not only do shareowners have little power, the gatekeepers and guardians paid to protect shareowner interests are almost always conflicted, leading to de facto control by management. At the same time, laws like the "business judgment rule" make it nearly impossible to hold fiduciaries accountable. Pension assets that are turned over to plan managers who provide kickbacks back to corporations earned 29% lower returns, according to a cited 2009 GAO report. The failures documented by Gillespie and Zweig cost investors and the public trillions, bringing the world economy to its knees. It is time boards stopped being the CEOs friend and instead took on the role of the CEO's boss. After a thorough examination of the issues, documented with an abundance of real-life examples, Gillespie and Zweig clo

Chilling tales and good advice

Have you ever wondered what REALLY happens behind closed doors in America's corporations? Have you ever wondered why America's corporations have made such horrible, short-sighted decisions? Have you wondered if there is anything you can do? If you have, then you must read "Money For Nothing." The short answer is that too many CEOs want - and get - rubber-stampers on their boards of directors, mostly old white guys more interested in keeping their cushy jobs than in helping the company or the shareholders. Did you know that in in a lot of companies the board doesn't have to pay any attention to what a majority of shareholders want done? This book reveals lots of interesting details in a very entertaining way. It also outlines lots of ways we can help stop the horrors.

Entertaining, rich and informative!

Money for Nothing is incredibly interesting and entertaining: it's full of rich and outrageous insider stories as well as a lot of analysis showing how and why most boards fail in their jobs. It gives the general reader, like myself, a peek behind the closed door of the boardroom and shows how shareholders are excluded from the system. Especially fascinating to me was how shareholders' own money is being being used to prevent and circumvent reforms through massive lobbying expenditures controlled by corporate executives. It also concludes with a section on companies and directors who are doing it right and gives twenty-five measures that could help to reform the structure and culture of boards. It's hard to imagine that the previous reviewer actually read this book as I found it anything but mundane!!!