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flexed their muscles. Now, after a string of managerial abuses, govern- Technologies that minimize environmental harm
ments have reasserted themselves and newly emboldened financial are big business with a big question mark. How
institutions have intervened. much of the current demand is due to social
Three recent forced resignations of CEOs set the stage for the concerns – and therefore susceptible to the chang-
book: Carly Fiorina at Hewlett-Packard, Harry Stonecipher at Boeing, ing whims of governments and consumers – and
and Hank Greenberg at American International Group. Murray argues how much to hard improvements that render these
persuasively that if their troubles had happened a decade ago, these technologies competitive with existing practices?
executives would have kept their jobs. What changed, he says, is that
Everyone may accept the urgency of staving off
personal liability, outside regulators, and aggressive investment funds
global warming, for example, but the actual social
have forced boards of directors to step in. Reluctantly, boards are now
and regulatory pressures to reduce carbon emis-
acting as real checks on managerial behavior.
The most interesting part of the book involves the identity of boards. sions will fluctuate, making business calculations
Now able to meet without the CEO, having key oversight functions, difficult. Pernick and Wilder, researchers and
and including fewer active CEOs in their midst, boards are taking on a publishers in this area, offer an accessible and de-
life of their own. A good deal of evidence suggests that directors are tailed survey of the major technologies and players.
showing no special loyalty to regular shareholders (they still pay CEOs Although technologies are improving quickly, the
as much as ever). And boards are hardly monolithic: A dramatic chapter authors acknowledge that the social concerns are
on the infamous leak investigation at HP shows deep divisions among still an enormous factor in their acceptance; even
the company’s independent directors. Clearly, directors must respect wind power use varies heavily depending on tax
the growing outside pressures on corporations. But where do their own credits. Yet they effectively argue that conventional
interests lie?
fuel sources and consumption also benefit from
That question is all the more pertinent in light of the challenge thrown
a complex array of subsidies. Rather than being an
out by a number of departed CEOs whom Murray interviewed: At what
external factor, social concerns are baked into
point does board oversight become so active that it undermines mana-
gerial decisions and corporate flexibility? the industry.