As Lehman’s stock continued to spiral downward to close on Friday at $3.60 — a level the company has not seen for over a decade — more investors started to ask the question that always seems to pop up when a company is on the brink: Where is the board of directors who were supposed to be guarding our interests?

As usual, the answer appears to be: supporting the company’s CEO, instead of pushing him to make difficult decisions before the firm’s back is against the wall. That’s one reason why — unlike other financial firms like Merrill Lynch, Washington Mutual, and AIG that have tossed out their CEOs — Lehman’s CEO Dick Fuld remains four months after giving the firm’s president and chief financial officer the boot on June 12. On Sept. 10, Fuld said the board has been “wonderfully supportive” in a conference call.

The writing has been on the wall that the board would behave this way for some time now.

Veteran corporate governance researcher The Corporate Library gave Lehman a "D" and rated Lehman's governance risk "high" in March after examining its annual proxy statement. The research firm was especially concerned that Lehman's fossilic board of directors had just awarded Fuld a sum a that put him in the ranks of the top 2% of American CEOs: $71.9 million. "Our D rating on the company is unchanged due to concerns about executive compensation and board composition," The Corporate Library wrote.

The Corporate Library's main beef about the board was that about half of Lehman’s 11 directors are over the age of 70, according to the firm’s proxy. In declining order: John D. Macomber, principal of JDM Investment Group, is 80. So is economist Henry Kaufman. Roger S. Berlind, a theatrical producer, is 77. Thomas H. Cruikshank, retired chairman and CEO of Halliburton Company, is 76. And John F. Akers, retired chairman of IBM, is 73. Each of them has been a member of Lehman’s board for almost 15 years on average.

Of course, older directors can be assets. But a large proportion of elders "are statistically more likely to encounter governance-related difficulties," according to The Corporate Library's research. “Our board is a joke,” says one Lehman executive who asks not to be named.

One Lehman director was not available for comment. A call to another director by BusinessWeek was not returned.

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