examiner’s report, the Lehman Brother’s Board of Directors paid too little attention to the details of the operations

of Lehman Brothers and also had limited financial service experience.

The board of directors, elected by the shareholders, is supposed to be the first line of corporate governance and

oversight for top executives. A second institution of corporate governance is the auditing firm the company hires to

review the company's financial records and certify that everything looks reasonable. A third institution of corporate

governance is outside investors, especially large shareholders like those who invest large mutual funds or pension
funds. In the case of Lehman Brothers, corporate governance failed to provide investors with accurate financial

information about the firm’s operations.

As a firm becomes at least somewhat established and its strategy appears likely to lead to profits in the near
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