Ex-politicians draw scrutiny over their plum board roles

[question everything]

Ex-politicians draw scrutiny over their plum board roles

By Martha Graybow
REUTERS

August 7, 2005

Many former U.S. politicians and diplomats have moved on to nice jobs as board members of big companies, but a backlash may be brewing as businesses face more scrutiny over who they bring in as financial watchdogs.

Boards need fewer superstar directors who sport prestigious resumes but lack financial expertise, governance experts argue. They say the corporate scandals of recent years show that boardrooms should be filled with seasoned business people who can sift through complex financial matters.

"When you go from (being) a member of Congress to a board you better know finance and accounting," said Roger Raber, head of the National Association of Corporate Directors, an education and research group. "I suspect a lot of people from the Hill don't have finance and accounting backgrounds."

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The financial gains that ex-government officials reap from board service also can leave bad tastes in the mouths of investors who see potential conflicts of interest. Former New York City police commissioner Bernard Kerik, who sat on the board of stun gun maker Taser International Inc., realized about $6.8 million from the sale of stock options. The issue raised eyebrows when Kerik was nominated as U.S. Homeland Security secretary because Taser was seeking to sell more of its devices to the government. Kerik later withdrew his nomination, citing questions over the immigration status of a nanny he employed. He later resigned from Taser's board.

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Home improvement retailer Home Depot Inc. recently named ex-Homeland Security chief Tom Ridge to its board. The appointment drew attention because Ridge helped encourage sales at Home Depot and other stores in 2003 when he urged Americans to stock up on supplies like duct tape to guard against possible terrorist attacks.

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