Compounded interest in conflicts of interest. Corporate lawyers on corporate boards.

[CorpGovActivist]

First, some context: for many years, I have joined other corporate governance activists in decrying the conflict of interest inherent in having a mere "service provider" - e.g., a partner at a law firm providing legal services to a company - sitting on a corporate client's Board of Directors.

There are many reasons why this is a bad idea. For instance, if the Board engages in actionable wrongdoing, the law firm is conflicted: it is protecting one of its own, rather than looking out for the owners' interests (after all, shareholders are the ones paying the hourly bilk).

So spare me the yammering about this thread being directed at a single candidate. http://www.google.com/search?hl=en&q=%22ropes+%26+gray%22+%22state+street%22+director+casner+conflict">I have earned my bona fides in this arena over many years, and be prepared to hang with facts if you want to criticize. Otherwise, yammer into the wind with the other misinformeds. Or, ask questions and engage, on the theory and on the practical implications involved.

For the record, a Ropes & Gray partner no longer sits on the State Street Bank Board of Directors, either. See the following:

* Patriot Ledger, State Street: Payments not a conflict of interest, March 17, 2005, p. 27

("State Street Corp. disclosed yesterday that it paid $5.78 million to the Boston law firm Ropes & Gray for legal services last year, and that the company's foundation gave $20,000 to Wellesley College.")

* Boston Globe, numerous stories, culminating with Truman Snell Casner, "Esquire's" retirement, and the lapse of the "permanent" Ropes & Gray board seat.

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The situation is the same for the Wal*Mart conflict. (http://query.nytimes.com/gst/fullpage.html?res=9A05E2DB163AF935A15751C0A962958260">New York Times)

The situation is the same for TCBY. (http://www.google.com/search?hl=en&q=but+only+so+far+clinton+tcby+director+rose+law+firm+board">Numerous outlets confirm that the Rose Law Firm provided legal services to TCBY)

Nothing I have found suggests that the Rose Law Firm also provided services to her third corporate connection: http://www.google.com/search?hl=en&q=lafarge+fined+clinton+france">Lafarge, which has been fined repeatedly.

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This is not a "broad-brush" attack. This is a factual, verifiable, and very real set of circumstances, which bear closer scrutiny, if you're at all intellectually honest.

This is no different than someone like http://en.wikipedia.org/wiki/Lawrence_Eagleburger">Larry Eagleburger sitting on the http://www.google.com/search?hl=en&q=eagleburger+halliburton+director">Halliburton/KBR boards, while simultaneously providing legal services and/or consulting services.

It's just not.

No, really. It's just not.

This is not flame-bait. It's grown-up discussion bait. And it's time some learned the difference.

- Dave

[CorpGovActivist]

1. An inconvenient fax kick. n/t