Moody’s Board “Disappeared” During Height of Crisis

May 10, 2010 by · Leave a Comment
Filed under: The Rating Agencies 

Legislation currently moving through Congress intends to empower rating agency boards by requiring a direct line of communication between the company officials who police for risks and the boards. Kevin G. Hill, writing for McClatchy’s Newspapers speculates that, “It’s not clear whether that would have made any difference at Moody’s.”

He quotes several sources from inside the company, who remained anonymous at the advice of their attorneys.  One executive complained, “My question the whole time has been, ‘Where the hell has the board been?’ I would have expected, sitting where I was, that I would have gotten a lot more calls from the board. I got none of that.”

Mr. Hill goes on to claim that those who had made presentations to the board found members to be “incurious.” Another staffer explained, “There was no (corporate) governance at the firm whatsoever. I met the board, I presented to them, and it was just baffling that these guys were there. They were just so out of touch.”

Only board member Nancy Newcomb, a retired senior officer for risk management at Citigroup, was singled out in the article as being one who would ask “tough” questions.

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