(GM) and General Electric Company (GE) used to be the most highly respected names in corporate America. Now their reputations and stock prices are shot. So is the credibility of their CEOs. And since their boards -- whose legal role is to protect the shareholders -- have protected these CEOs instead of the shareholders, the loss of credibility extends to the entire system of American corporate governance.
Why the loss of credibility? Until the 1970s, GM was the dominant player in the global automobile industry. But thanks to its failure to respond effectively to competition which offered better quality and service, GM has suffered a steady decline, interrupted for a few years here and there with prosperity driven by cheap gas and an appetite for SUVs and trucks.