Martha Stewart might be a bigger celebrity, but Richard Grasso could soon become nearly as well known as a lawsuit filed this week by New York Attorney General Eliot Spitzer against Grasso, former head of the New York Stock Exchange, proceeds and more becomes known about how Grasso and the NYSE board functioned - or malfunctioned.

The Martha Stewart trial was about insider trading, though that was not the technical legal charge. In the Grasso case, Spitzer is alleging that cronyism and a lack of board independence was partly responsible for awarding Grasso a compensation package valued at nearly $190 million, including severance and retirements benefits.

Grasso's wildly lucrative pay package was approved by a board of directors that included heads of some major U.S. corporations whose shares were bought and sold on the stock exchange run by Grasso. Spitzer is charging that Grasso and one former NYSE board member, in particular, mislead the board on the way to approval of the gold-plated pay package. The lawsuit, filed this week, also alleges that Grasso and some on the compensation committee withheld information from the full board, including a special $18 million bonus received by Grasso in 1999-2001.

Spitzer's lawsuit charges that a lack of independence led to some of the problems surrounding Grasso's excessive pay package. Governance of the NYSE clearly presents unique problems, with Grasso running a stock exchange while CEO's of some companies whose shares are traded on the NYSE sit on stock exchange board and set Grasso's salary. Critics argue that makes it all the more important for the NYSE board to not be dominated by corporate executives whose companies are traded on the exchange. Instead, investors should be have greater representation and execs on the board should be from companies not affiliated with the NYSE.

Prior to governance reforms that have been implemented at the stock exchange following Grasso's resignation in September 2003, the NYSE the CEO picked the compensation committee which in turn set the CEO's salary, bonus and benefits package. That clearly biased practice has now been changed.

Another ongoing Wall Street scandal involves Computer Associates, the world's fourth largest independent software company, where former CEO and chairman of the board Sanjay Kumar received a $1.2 billion dollar bonus in 1998. That mammoth bonus that was awarded by a CA compensation committee that included the now infamous Richard Grasso.

As the public watches the unfolding of the Grasso case and other high-profile lawsuits over failed corporate governance, there will be increased awareness of incestuous cronyism, where a "you scratch my back and I'll scratch yours" mentality ruled from one corporate board room to the next.

Intense pressure from major investors, including some of the country's largest pension funds, as well as regulatory bodies have begun to force changes to corporate governance rules. The public testimony, if it comes to that, of high-powered CEOs talking about how they set Grasso's pay at the NYSE and how the board lacked critical independence to challenge Grasso and his pay plan, will go a long way to further push reforms into boardrooms across the country.

Spitzer's lawsuit is seeking the return of $100 million from Grasso. But perhaps more important than the final outcome of the lawsuit and whether or not Grasso returns some of his $187 million is the impact the lawsuit might have in America's corporate boardrooms.

Watching the testimony illustrating the negative consequences of apparent conflicts of interest, lack of board independence and cronyism on corporate boards could introduce a long-needed breath of fresh air into mahogany-paneled corporate board rooms. And if increased public pressure for independence and greater transparency from boards of directors doesn't force changes in corporate governance, maybe the threat of lawsuits will.