HIGHTOWER: Corporate Boards

Like the cowbirds you see riding the backs of cattle, corporate directors have a symbiotic relationship with the corporate managers who choose them to serve on their boards.Especially if you are a prominent cowbird, like former-Defense Secretary Frank Carlucci, former-Labor Secretary Ann McLaughlin or former-Health & Education Secretary Joe Califano. Together, these three serve on 34 corporate boards, including such giants as Chrysler, Travelers insurance and K-Mart.Such "celebrity directors" -- also knows as "trophy directors" -- are usually hand-picked by the very chief executives whose management they are supposed to oversee. A New York Times report by Judith Dobrzynski finds that these board directors and the chief executives end-up feeding off of each other, instead of serving stockholders or the larger public. These "star" directors tend to lavish huge paychecks on top corporate management and, in turn, they tend to draw fat paychecks from the management. It is the essence of "symbiosis."For example, of the nine corporate boards that Joe Califano sits on, it is figured that the chief executives are overpaid by 281 percent. Having scratched their backs, these chief executives then scratch Joe's back -- he draws around a million bucks a year for siting on their boards. Symbiosis.The Joe Califanos are supposed to be "governing" the corporation on behalf of stockbrokers and the community, but mainly they end-up subservient to management. To be otherwise would disturb the status quo and cost you your board seat. As one investment analyst put it: "If [a director] aggravates the CEO of one company, word gets around. And you want to be a team player. That's the problem with boards -- the team-player culture."Symbiosis means the executives and the directors take care of each other and the hell with the rest of us.

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