Carl Icahn Once Said, 'The Boards In This Country Are Not Doing The Job, And That's Why You Have The Trouble On Wall Street'

In 2009, Carl Icahn, a famous billionaire investor, strongly criticized corporate boards of directors and their lack of oversight of CEOs, blaming them for many of Wall Street’s financial troubles. 

“The trouble with the country is that we don’t have accountability. The boards in this country are not doing the job, and that’s why you have the trouble on Wall Street,” said Icahn in an interview with ABC News.

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He stressed how these boards ignored obvious warnings about risky financial practices, namely those involving mortgage-backed securities, which contributed to the financial crisis. Despite the damage these risky moves caused, top CEOs walked away with huge bonuses while the real losers were the shareholders. Icahn called this situation “unfair and wrong.”

He also slammed the practice of giving huge salaries to CEOs who aren't doing a good job, calling it a “total disgrace” and criticizing corporate boards that often behave like a “fraternity,” where everyone is too friendly and no one asks the tough questions.

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According to him, that’s why less capable people lead companies: These CEOs ensure no one smarter than them gets promoted. He said, “[The CEO] would never have anyone underneath him as his assistant that’s brighter than he is because that might constitute a threat. So, therefore, with many exceptions, we have CEOs becoming dumber and dumber and dumber.”

Curiously, in 2024, Icahn is involved in a situation that echoes some of the concerns he raised in the past. The U.S. Securities and Exchange Commission (SEC) is looking into Icahn and his company, Icahn Enterprises, regarding the disclosure of certain financial details, particularly his use of company shares as collateral for personal loans. This review followed a report by Hindenburg Research, which raised questions about the company's valuation practices.

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Although Icahn did not admit to any wrongdoing, his company's stock has experienced a noticeable decline, dropping over 20% in the past year. Icahn and his company agreed to pay $2 million. 

In a way, this situation highlights the same issues Icahn has been talking about for years. The board of directors is key in ensuring companies are managed properly. When they don’t closely monitor things, it can create big problems for the companies and their shareholders.

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