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Directors Running Scared

Blackstone Group honcho Steve Schwarzman just finished up a keynote here in Philly. Nothing too surprising, with the regular litany of driving forces behind the trend of multi-billion dollar companies being taken private: Lower cost of capital, Sarbanes-Oxley, junk bond market health, debt securitizations, etc.

But one brief anecdote of interest: First, a public company CEO recently told Schwarzman that each of his company’s directors now bring their own attorneys with them to board meetings. “Is the company under investigation?” Schwarzman asked the CEO. “No,” replied the CEO. “The board members just want to be protected in case anything ever was to happen.”

Scary, although I’m not terribly concerned about the impact of SOX on large corporations. Having to meet quarterly Wall St. expectations is another animal…