Former Securities and Exchange Commission chairman Arthur Levitt has given American International Group (AIG) a corporate governance makeover, reports The Wall Street Journal. This came after ex-chief executive Hank Greenberg was forced out after accusations of him manipulating the accounts to boost its share price.

Changes include separating the role of chairman and chief executive, making sure that most directors are independent and requiring that independent directors meet in special sessions without company management. Another interesting change is a ban on directors soliciting charitable contributions from the company. Remember, Greenberg had form in this area.

If you don't subscribe to the WSJ, you can read it here.

The question is will the better governance create a better company? Will the changes work?

Greenberg has told the WSJ that it will hurt the company. "Outside boards don't know as much about the workings of the company...I think shareholders do better when you have somebody running a company that's running it."

In the meantime, the Business Law Prof Blog has cast doubt on whether the ban on directors soliciting charitable contributions will stick, simply because there are ways around it.

This will be an interesting one to watch.