Hank Greenberg speaks: "You couldn't build an AIG today"

Kimberley Strassel has an interesting interview with Hank Greenberg, formerly of AIG, in today's WSJ. The article discusses Eliot Spitzer's campaign against Greenberg. I have more background here.

According to Greenberg,

"You couldn't build an AIG today" . . . .Overbearing regulators, new corporate governance rules, protectionism, a failing tort system, prosecutors unleashed -- these, as he sees them, are the obstacles to corporate greatness. . . . . . "Why is it that private equity is growing as fast as it is. . . ."

"One of the biggest problems" facing America's competitiveness at the moment "is regulation," he states. He notes the legislative fiasco that flowed out of Enron -- Sarbanes-Oxley. "Any time you publish regulations in a crisis mode, you probably do it wrong," he says, and as proof he points to all the companies now listing in London rather than New York.

After Enron, "the regulators became far more aggressive, threatening boards of directors with all kind of dire things if they didn't do certain things. What happens? The board simply takes over. And when that happens you don't have a company that is thinking about innovation or risk-taking. . . . And once you stop thinking about risk and thinking only about compliance, you are no longer going to be a growth company." . . . .

Today, "everybody is playing it close to their vest, and don't do anything. If you do something, you get slapped down, so why do it?"

So Greenberg today is turning away from investment opportunities in the US and focusing on China. He says

"it's nice to go to a country where they don't pay as much attention to the headlines." Only, it seems, to the bottom line.

Comments

[China Law Blog]

This is a case of the grass being greener on the other side (of the world) as China certainly has plenty of its own regulations, particularly with respect to foreign business.

China Law

[Robert Schwartz]

"You couldn't build an AIG today"

So what? It is, and was, just an insurance conglomerate. I would be worried if Andy Grove said you could not build an Intel today.