While heads have rolled in response to the financial crisis, boards of directors have remained relatively unscathed.

As the Financial Times points out, there is a real shortage of director talent when it comes to financial services.

"One of the main charges levelled at directors of financial groups is that they do not know enough about the industry their companies are in. Even Wall Street executives admit that, although day-to-day affairs are the realm of management, greater financial literacy could have helped directors challenge management's appetite for risk.

" ' The vast majority of these people could not tell you how a derivative works. It is very easy for skilled, charismatic managers to persuade them that whatever they were doing was good business,' says one.

"That impression is reinforced by a look at the boards of eight prominent US financial institutions: Citi, JPMorgan Chase, Bank of America, Goldman Sachs, Merrill Lynch, Morgan Stanley, Lehman Brothers and the pre-rescue Bear Stearns. According to their biographies on the companies' websites, more than two-thirds of the occupants of those board seats had no significant recent experience in the banking business. Fewer than half had any financial services industry experience at all.

"Moreover, many of the directors without a financial background happened to sit on highly technical board committees. At Lehman, for example, Roger Berlind, a theatre impresario and private investor, is on both the board's audit committee and the finance and risk committee. At Citi, John Deutch, a former head of the CIA who is now a physical chemistry professor at the Massachusetts Institute of Technology, sits on the audit and risk management committee. Similarly, Tommy Franks, the retired top US Army general, is on the audit committee of Bank of America.".

All this suggests is that the system of corporate governance, which is supposed to provide a set of checks and balances, has failed abysmally.