The WSJ story on post-9/11 options grants has set off an interesting debate. In a earlier post we tried to capture recent thinking on the subject. Our bottom line is that corporate boards, and the CEOs they hire, have failed to meet their obligations as fiduciaries.

Two of our favorite bloggers have added to the debate today with additional posts on the topic. The rhetoric has been hotter than normal due in part to the connotations inherent in the 9/11 aspect of the story. Adam Warner puts into context the entire options-issuance “scandals.

Backdating, spring-loading, front-running, bottom fishing, double bagging, or whatever, are indeed the same story. All involve the simple concept of boards looking for every way under the sun to augment the value of exec option packages. At shareholder expense I would add.

Barry Ritholtz takes the discussion one step further. Instead of relying on the cleansing light of publicity to change behavior, Barry proposes that investors think about avoiding those companies that felt comfortable using 9/11 as an opportunity to bulk up executive compensation packages.

…I say its no longer time for talk, its time for action: I will not invest in these companies — lets not call it a boycott, but rather, an investment choice — because I believe that the judgement, ethics and respect for shareholders is extremely important. I want corporate management that creates and not destroys shareholder value.

We think that as a practical matter this will be a difficult proposition to implement. However one can think of this as simply another form of “socially responsible investing.” Instead of focusing on what a company produces (or how they do that), the focus shifts to how management fulfills their fiduciary responsibilities. Investor memories are often quite short, however it is heartening to read that some one out has not forgotten.