Bear Stearn's Board 'Busy Elsewhere'

Where was Bear Stearns board while the company collapsed? At least three of the fallen bank's directors sit on four or more other boards, including members of Bear's risk and audit committees, according to Financial Week. 

Proxy data compiled by Financial Week and The Corporate Library, a research firm, show Bear Stearns is one of only two publicly traded U.S. companies to have as many as three of its directors sitting on at least five public company boards. The other company, FW notes, is Acuity Brands, which makes lighting fixtures.

That three directors of Bear’s 12-member board had such schedules raises the question: Were they too stretched to devote the necessary time and attention to Bear, as the biggest underwriter of U.S. mortgage bonds was collapsing over the past year, culminating in a run on the bank and a fire sale to JP Morgan earlier this month.

“Res ipse loquitur [the thing speaks for itself],” Charles Elson, a professor of corporate governance at the University of Delaware, and a director at AutoZone and HealthSouth, told FW. “The more board work you’re doing, the less focus you can put on any individual company or task. I would expect everyone will be taking a closer look at Bear’s board, given the lawsuits that will be floating around and the massive losses.”