George,
Don't you find Mauldin's commentary a little, shall we say, idiotic? Not the part about pensions and assumptions about future growth, that is fine, that has been discussed many times by many people in the past. I mean the part about the "Wendy Gramm Factor". To wit:
<<Wendy Gramm had the unfortunate position of being head of the auditing committee for Enron. She was head of the Commodities and Futures Trading Commission and Senator Phil Gramm's wife. Those of us who know her know she is smart, honest and as genuinely committed to integrity as anyone with whom you could hope to be associated. There are many in Texas who think the wrong Gramm was running for President a few years ago.
How could she have let Enron get away with such outrageous accounting practices? Shouldn't she be held responsible for the problems at Enron? It happened on her watch, after all.
And that illustrates the problem. When a Wendy Gramm can be misled and fooled by management, accountants and lawyers, what hope does the average audit committee head have? I can tell you that corporate audit committees all over America, especially if Arthur Andersen was the auditor, are doing some serious soul searching.
Corporate boards of directors are like mushrooms: they are kept in the dark and fed horse manure. (My less-than-sainted-Dad had more colorful terms, but you get the picture.)>>
Now, surely, directors are supposed to know at least how a company is making their money, why their margins are so high, what are all those partnerships anyway, what debt the company has. They aren't just supposed to give the company access, that isn't what they are paid for, or at least it isn't what any "smart, honest and as genuinely committed to integrity as anyone with whom you could hope to be associated" director gets paid for. Especially a director on the chair of the audit committee when the CEO and other senior management is getting unbelievable amounts of money. Any director that is being kept in the dark and can't do the job of director should either quit or bring it to the attention of shareholders and get rid of management.
I know that isn't how it works in practice, but for Mauldin to suggest that any director of Enron was a duped innocent, a poor victim of the wickedly clever management, is ridiculous.
He demonstrates here that he is suck up like the rest of them.
Sam |
