The end of 'fast and loose'.

• Position: Letter From The Chairman - Accountability of corporate directors - Brief Article - Column

NINETY MILLION Americans can't be wrong. They have grown suspicious and even contemptuous of corporate chieftains. Over the past two years, these shareholders have lost trillions of dollars. Investment portfolios and retirement accounts have evaporated, dashing the expectations and dreams of millions of Americans. Together with their representatives in Congress, they are looking for those responsible for their misfortunes, and increasingly they are zeroing in on boards of directors.

A crisis of investor confidence is rocking Wall Street. Trust necessary for efficient markets has eroded as a torrent of business scandals has exposed fundamental breakdowns in corporate governance. With each new revelation of corporate excess and wrongdoing, America's distrust of business has intensified.

President Bush rightly noted, "Accountability must begin at the top." Too many boards have become complacent. They have failed to ferret out questionable accounting and misleading reporting. They have failed to reign in excessive compensation schemes. They have failed to prevent deception, malfeasance and fraud. In short, these directors have failed to perform their fundamental fiduciary duty to look out for their shareholders' interests.

Directors were either too passive or in some cases too conflicted in their corporate oversight. Their laxity allowed for egregious breaches of trust that included cooking the books, shading the truth, and enriching top management. Employees and shareholders have...