Bryan Hong
Corporate boards that aim to maximize shareholder value should use executive compensation not to reward managers for luck, but to pay for their abilities and the quality of their decisions. However, this poses two significant challenges: measuring management’s ability and ruling out other independent factors. First, it is very difficult to measure and assess the ability and quality of managerial decisions, which prevents boards from … [ Read more ]
Content: Quotation | Author: Bryan Hong | Source: Ivey Business Journal | Subject: Corporate Governance
Paying for CSR is Good Governance
More and more firms today are including incentives for corporate social responsibility (CSR) in their executive compensation contracts. But is this a worthwhile practice? Who benefits from it? Recent research shows a link between CSR activities and better social performance and the bottom line. But is paying for CSR beneficial for shareholder interests? Accounting and stock-price performance incentives are already common in executive compensation contracts … [ Read more ]
Content: Article | Author: Bryan Hong | Source: Ivey Business Journal | Subjects: Corporate Governance, Social Responsibility (ESG)