American International Group's former chairman, Maurice Greenberg, would appear to be barred from returning as an AIG director under a mandatory retirement rule the company's board adopted yesterday.

The rule was one of a number of corporate governance moves by the board of a company rocked by continuing investigations of its accounting.

AIG also announced it was adding former Securities and Exchange Commission chief accountant Michael H. Sutton, 65, as a director.

AIG said that under its mandatory retirement age guideline, no director can stand for election after reaching age 73.

Although the guideline gives the board the ability to waive the limitation for any director for a period of one year, it would seem to preclude the return of the 80-year-old Mr. Greenberg, who resigned as chairman in April amid continuing state and federal revelations of improper AIG accounting.

Mr. Greenberg==who joined the company in 1960 and at age 78==had still failed to put a clear plan for CEO succession in place when he left his CEO spot in March. Mr. Greenberg still chairs Starr International Company, which holds $20 billion in AIG stock, which the company is suing to obtain control of the shares.

A spokesman for the company, Chris Winans would not comment on any application of the guideline to Mr. Greenberg.

AIG, which said the age waiver would be "used sparingly," also announced that Bernard Aidinoff, chairman of the board's Nominating and Corporate Governance Committee, said he does not intend to stand for election at the company's next annual meeting. Mr. Aidinoff, 76, has served as an AIG director since 1984.

A company spokesman said there is no mandatory retirement age for AIG non-board executives.

AIG's board also adopted a majority voting guideline, requiring that director nominees in uncontested elections who receive a greater number of votes "withheld" than "for" election must tender their resignations for consideration by the Nominating and Corporate Governance Committee. The committee will recommend to the board the action to be taken with respect to such resignations.

The guideline also requires AIG to disclose publicly each such resignation and the related action taken by the board.

AIG Chairman Frank G. Zarb praised Mr. Aidinoff's long service, and said the board's new measures are part of a continuing enhancement of corporate governance at AIG.

Other recently adopted measures include a guideline that at least two-thirds of the board should be independent under the New York Stock Exchange listing standards.

The board also approved a change in AIG bylaws so that the role of chairman and CEO are separate, and so the chairman is selected from the independent directors.

"AIG is taking continuing steps to strengthen corporate governance, increase transparency and improve disclosure," said Martin J. Sullivan, AIG president and CEO. "We have made improvements in the processes, guidelines and bylaws governing our company, elected distinguished additional members to our board, provided increased information in our financial statements, and have been working to build a constructive dialogue with our regulators."

Among the regulators the company is in talks with are New York Attorney General Eliot Spitzer, who has sued the company for fraud, and the SEC.

The AIG announcement concerning Mr. Sutton said he served the SEC as chief accountant from 1995 to his retirement in 1998, and that he has served as a special, full-time consultant to the Financial Accounting Standards Board.

Special Reports /

AIG Board Rule May Veto Any Greenberg Return

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