The easy explanation for MF Global's downfall is that it was killed by Jon S. Corzine's risky trading bets. Yet MF Global was torpedoed not only by Mr. Corzine but by its board.

The board at MF Global is highly sophisticated and experienced. It includes two former senior executives from HSBC, the former chief financial officer of the Aon Corporation and a top member of the private equity firm J. C. Flowers & Company.

Under this board's watch, MF Global invested in European sovereign debt using short-term financing. When ratings agencies and investors became spooked by the European debt exposure, the financing dried up and a classic run on the bank soon ensued. Bankruptcy followed.

On paper, these highly qualified directors should have realized that Mr. Corzine and MF Global were taking undue risks. After all, it was short-term financing that brought down Lehman Brothers and Bear Stearns. There is even a board member who appears to specialize in this type of financing and risk management: Robert S. Sloan, a managing partner of a company that focuses on in global collateral management and counterparty risk management

This is also not a case of willful blindness. The board appears to have been thoroughly aware of these trades and discussed them. The existence of these trades was also disclosed by MF Global in its public filings, though perhaps not thoroughly. By the available indications, MF Global directors approved these trades.

The question is, why? How could this experienced board have been so foolish, particularly when several directors appear to have expertise on this matter?

David Fuller's view In the 1970s, I spent a few years on the board of a Commodity Broking firm, as director of research. I do not know if it was managed any better or worse than other firms of its kind but it always had a strong and watchful financial director.

Additionally, the chairman, managing director and dealing directors worked very closely with the financial director and were extremely disciplined regarding daily margin requirements. They all knew that the firm could be bankrupted overnight by a significant bad debt.

Directors and traders all had their own accounts with the firm. Individually, each of us was subject to the same rigorous financial scrutiny in terms of margin requirements, without exception. I am not aware that any of the firm's capital was used for similar speculation.

In reading about MF Global's unfortunate collapse, the obvious questions I have are: Why were Jon Corzine and his board trading with the firm's capital? Why were they not trading with their own money in their own separate accounts, just like the firm's customers?

And there is the rhetorical question, if the directors of these companies are free to speculate with the firm's working capital, how long will it take before they overtrade, guess wrong and sink the company?

This cannot effectively be an issue of external regulation. It certainly is matter of collective self-regulation within all financial companies.