For immediate release
February 24, 2010
AFR Calls on Senate to Maintain Strong Corporate Governance Reforms
Says Board Failures a Key Factor in Financial Meltdown;
Questions Credibility of U.S. Chamber of Commerce-led Opposition
WASHINGTON, D.C. – With the U.S. Senate poised to move forward on major financial reform legislation this week, Americans for Financial Reform today urged members of the Senate Banking Committee to maintain their support for strong corporate governance reforms. In the letter to Chairman Christopher Dodd and Ranking Member Richard Shelby, AFR also challenged the credibility of a U.S. Chamber of Commerce led consortium of lobbyists who opposed the reforms in a letter to the Banking Committee last week.
“Investors and analysts have repeatedly emphasized that the financial crisis was a direct result the of widespread board-level failures in oversight in the financial sector and the pay-for-failure executive compensation schemes that incentivized excessive risk-taking by big banks on Wall Street,” said AFR Executive Director Heather Booth. “The current inadequate governance structures allowed bank CEOs to reward themselves with massive bonuses even as they sent the global economy into a tailspin. The corporate governance provisions in the Stability Act are about accountability. If the Senate wants to avoid another Wall Street bailout, it needs to provide shareholders the market-based tools they need to hold failed boards and management responsible for their excesses.”
In addition to highlighting the need for governance reform, AFR also challenged the standing of the U.S. Chamber – the lead opponent to inclusion of the governance provisions in the Senate bill – to speak credibly on best practices in corporate governance. In the letter to Senators Dodd and Shelby, AFR noted that “Tom Donohue’s failed service as a corporate director is emblematic of the need to reform this broken system, having earned millions in fees as a director of scandal-plagued companies whose shareholders suffered huge losses during his tenure. … Mr. Donohue, the U.S. Chamber and their army of lobbyists are uniquely unqualified to speak credibly on corporate governance reform.”
The full report on Donohue’s corporate board service can be found here.