|This is not just a gloomy, hypothetical fable about how an American business might possibly fail, with investors unprotected, company value squandered, and the governance of enormous and important companies breaking down. This is, unfortunately, a real scenario that has been repeated time and again during the recent economic meltdown, as companies have exploded like a string of one-inch firecrackers. When the spark runs up the spine of the tangled interconnected fuses, they blow up one by one.
Something is wrong here. As Warren Buffett observed in his 2008 letter to Berkshire Hathaway shareholders, “You only learn who has been swimming naked when the tide goes out—and what we are witnessing at some of our largest financial institutions is an ugly sight.”
|Money For Nothing
How the Failure of Corporate Boards is Ruining
American Business and Costing Us Billions
By John Gillespie and David Zweig
If the new Supreme Court ruling isn't depressing enough, you'll want to read this excellent book recently published by Simon and Schuster's Free Press.
According to their employment agreements approved by boards, 96 percent of large company CEO's have guarantees that do not allow them to be fired “for cause” (unsatisfactory performance), which means they can walk away with a huge payout. And 49 percent cannot be fired even for breaking the law by failing in their fiduciary duties to shareholders.
If you own stock — and 57 million U.S. households do — every cent of these outrages comes out of your pocket, thanks to many boards of directors who are supposed to represent your interests.
John Gillespie and David Zweig have written a timely exposé of these underworked, overpaid “rubber stampers.” It's aptly titled Money for Nothing.
The co-authors and their friends celebrated the book at a party co-hosted by Celia and Henry McGee, Patricia Marx and Paul Roossin, and Susan Orlean. Ms. Orlean is married to Mr. Gillespie.
|David Zweig and John Gillespie, co-authors of Money For Nothing.
David Zweig has worked at Time, Inc. and Dow Jones and co-founded Salon.com. He currently consults on improving the performance of executive groups.
John Gillespie was an investment banker for eighteen years with Lehman Brothers, Morgan Stanley, and Bear Stearns. He is married to New Yorker writer Susan Orlean.
|Henry McGee and Stephen Shepard. Henry McGee is President of HBO Home Entertainment. Mr. Shepard is the founding dean of the Graduate School of Journalism at the City University of New York. From 1984 to 2005, he was editor-in-chief of Business Week, the largest business magazine
in the world.
|Three out of five of the co-hosts: Celia McGee, Susan Orlean, and Patricia Marx.||Paul Roossin, scientist and Jonathan Grant, financial analyst.|
|Jay Gillespie and his girl friend, Ruth Shannon, both graduates of Bard. Gillespie was a film major and Shannon studied creative writing. She now works for Ruder Finn digital studios. He has done a short film for Money For Nothing, starring his father. Click to view.||Jeff Conti is a landscape and floral designer who lives in Baltimore. He was here doing a wedding at Stone Barns.|
|Isolde Motley, Henry McGee, and Joel Motley. Ms. Motley is the former Editorial Director of Time Inc. and the founding editor of Martha Stewart Living. Her husband works in public finance.|
|Emily Loose, the editor of Money For Nothing published by Free Press, with John Gillespie and Susan Orlean.||R.L. Stine as in Goosebumps.|
|Erik Eckholm, National correspondent for The New York Times.||Former Governor Eliot Spitzer. Spitzer is a neighbor of John Gillespie and Susan Orlean in Pine Plains which is in Duchess County.|
|Mark O'Donnell, who co-wrote (with Tom Meehan) the lyrics for Hairspray and Cry Baby.||Meg Wolitzer. Ms. Wolitzer is regarded by many as the fiction laureate of feminine social politics. Her most recent novel is The Ten-Year Nap.||Michael Roberts, Executive Director of New York Public Programs for Asia Society.|
|Celia McGee with Chip McGrath. McGrath is off to Vancouver next month to cover the Winter Olympics for The New York Times. McGee just back from Sydney, Australia where she reported a feature for the Times' Travel Section.||The Nation's Eric Alterman with The New Yorker's Susan Morrison. Alterman's most recent book is Why We're Liberals; A Political Handbook for Post-Bush America.|
|Susan Morrison and Guy Martin. Ms. Morrison is an editor at The New Yorker. Mr. Martin is a writer and is married to Sarah Crighton.||Sarah Crichton of Sarah Crichton Books at Farrar, Straus & Grioux, and Kurt Andersen, host of
|The toasts began with one by Henry McGee. A fellow Harvard Business School grad of the co-authors, McGee told us if we all read the book we could save 150K on tuition.|
|Randy Cohen, Ethicist columnist for The New York Times, Joe Ehrlich, Andy Borowitz, Susan Orlean, Ann Kirschner, and R.L. Stine.
In her toast, Susan said: "Men are always telling women, especially when they're in the middle of excruciating labor, that childbirth is much harder on the guy. I finally understand that -- because writing a book is definitely much harder on the spouse."
Ms. Orlean is a staff writer for The New Yorker. Her books include The Orchid Thief, which was made into a movie called Adaptation. Orlean is presently writing a biography about the dog actor,
Rin Tin Tin.
|Patricia Marx then raises a glass, or would have if she hadn't been holding her notes, saying that as a co-host of the party she was responsible for bringing the ice, which she feels contributed significantly to the success of the event.
Ms. Marx writes a column called 'On and Off the Avenue' for The New Yorker. Her latest novel is Him Her Him Again The End of Him. James Traub from The New York Times is on the far right.
|David Zweig introducing himself to the crowd as "I'm the Penn of Penn and Teller."|
|Kit White, an artist and his wife, Andrea Barnett, who is a writer. Mr. White describes himself as a painter of metaphysical landscapes. An exhibition of his work opens on March 2nd at the André Zarre Gallery-259 West 20th Street in Chelsea.||Andy Borowitz and his very pregnant wife. Mr. Borowitz writes humor pieces for The New Yorker and also does standup comedy at Caroline's. He will be performing at the 92nd Street Y on January 27th reviewing Obama's first year in office (preceding the President's State of the Union address).|
|Susan Orlean and Patricia Marx with Gary Bass, a professor at Princeton.|
|Virginia Cannon, The New Yorker senior editor, and her husband and editorial ward, Hendrik Hertzberg, author of ¡Obamanos!: The Birth of a New Political Era.||Henry McGee showing off his kindle and The New Yorker home page to Hertzberg and Cannon.|
|Jay Lundy, who graduated from Harvard last year and is doing Teach for America in New York, and Kyle Wiggins, one of his college roommates, who is now working for the Heckscher Foundation.||The Chipster, as he is affectionately called by some of his friends, bags a book.|
|Anne Kreamer, author of Going Gray.|
|Susan Orlean and her husband John Gillespie.||John and Jay Gillespie.|
|Text and photographs © by Jill Krementz: all rights reserved.|