A few months ago I wrote that the GM board must go. At least six of the directors have been replaced according to the Herald this morning including Armando Codina, an establishment figure in the Miami business community. Codina was also on the board of Merrill Lynch, that no longer exists. "I do it because I give a damn," Codina told The Miami Herald last year on why he sits on the boards. "They are important to this country and the economy." Well...
To serve on the board of a large, important corporation is not just altruism: you don't get there unless you have mastered how business, profit, and politics mix. The conception of good business sense reflected in the net worth of so many corporate board members in America has turned out very poorly for taxpayers, voters and specifically bondholders and shareholders of failed American giants in the automotive sector and finance.
Mr. Codina is right: boards of directors of large corporations are very important to this country and the economy. He has company in bearing responsibility for miscalculating risk to corporations on whose boards he served. Still, it is a very small group of elite businessmen who stood by as the economy veered-- in the past decade-- into the deepest ditch since the Depression.
Mr. Codina was unavailable to comment to The Herald. With the benefit of hindsight, it would be interesting to know what Mr. Codina would have done differently as a director to have avoided the crises that are imposing staggering debts of taxpayers. Did he meet the standards of fiduciary responsibility? What does he believe, now, about the business models of growth and development in Florida that are badly broken? In my view, they were bad models to begin with. The buck must stop somewhere.