509 Posts Found

In setting compensation, companies consider internal equity (where the compensation system is perceived internally to be fair) and external equity (where the compensation for any particular position is competitive with the external market). Most companies focus primarily on external equity when it comes to executive pay. If they find that a competitor is paying its CEO or chief financial officer a certain amount, they … [ Read more ]

Content: Quotation | Authors: John Mackey, Rajendra Sisodia | Source: strategy+business | Subjects: Compensation, Corporate Governance, Human Resources

CEOs who took part in Booz & Company’s 2011 study of CEO turnover share their thoughts about the difficulties they faced, the successes they achieved, and what, in retrospect, they might have done differently in their first year on the job.

Content: Article | Authors: Gary L. Neilson, Ken Favaro, Per-Ola Karlsson | Source: strategy+business | Subjects: Corporate Governance, Leadership, Management

In football, there is a rigid separation of the real market — the games played on Sundays — from the expectations market, or the betting that takes place prior to the game. No participant in the real market is permitted to participate in any way in the expectations market. If they do, they risk a lifetime ban for even one infraction. There is an even … [ Read more ]

Content: Quotation | Author: Roger L. Martin | Subjects: Compensation, Corporate Governance, Economics, Finance

American capitalism is in dire straits, caught in a perilous pattern of increasing volatility, decreasing investor returns, and ongoing bad behavior by executives. And it’s getting worse. Since the turn of the twenty-first century, we’ve seen two massive value-destroying market meltdowns and a string of ethics breaches, including accounting scandals, options-backdating schemes, and the subprime mortgage debacle.

Just what is going on here? Is it the … [ Read more ]

Content: Book | Author: Roger L. Martin | Subjects: Corporate Governance, Economics, Management

Agency theory, derived from neoclassical economics, together with the gospel of shareholder value, has led to managers being compensated for doing the wrong things. Stock-based compensation, for example, focuses executives on expectations markets rather than real markets, where customer value is created. It is this focus on maximizing what should be an ancillary goal that has led to the marginalizing of customers as “marks” to … [ Read more ]

Content: Quotation | Authors: David K. Hurst, Roger L. Martin | Source: strategy+business | Subjects: Corporate Governance, Economics

You can rise quite high in an organization by your own personal ability and by doing things better than other people. But as a CEO, you can’t do it all yourself. When you’re running a company with a presence in 170 different countries, you just can’t be there all the time. So it’s the most important part of your job to build the right team. … [ Read more ]

Content: Quotation | Source: strategy+business | Subjects: Achievement, Career, Corporate Governance, Leadership, Management

Look at all the different stakeholders of the company and define your position toward each of these groups in the first year. With the board, come to an agreement about corporate governance, about responsibilities, about the delegation of power and authority, and about the strategy. Then take the time to build up your relationship with the employees — to communicate with them, to explain to … [ Read more ]

Content: Quotation | Source: strategy+business | Subjects: Corporate Governance, Leadership, Management

What I would say to a new CEO is to draw a diagram and put yourself in the center. At the top of the vertical line, put your board and shareholders; at the bottom of this line, the management team and employees. On the left of the horizontal line, put what we can call the “market-driving factors” — customers, distributors, industrial partners. On the right, … [ Read more ]

Content: Quotation | Source: strategy+business | Subjects: Corporate Governance, Leadership, Management

In The Future of Boards: Meeting the Governance Challenges of the Twenty-First Century, Professor Jay Lorsch brings together experts to examine the state of boards today, what lies ahead, and what needs to change.

Content: Article | Authors: Jay W. Lorsch, Julia Hanna | Source: Harvard Business School (HBS) Working Knowledge | Subject: Corporate Governance

Few boards look at how the CEO’s total wealth invested in the company changes as stock prices fluctuate. They could—and they should.

Content: Article | Authors: Brian Tayan, David Larcker | Source: McKinsey Quarterly | Subject: Corporate Governance

This governance expert has solid suggestions for making an audit committee what it is supposed to be – truly effective and beyond reproach.

Content: Article | Author: Richard LeBlanc | Source: Ivey Business Journal | Subject: Corporate Governance

Every business needs three types of people: Flashlights, who see what is coming and send warnings signals in a timely fashion; Innovators, who pick up those signals and innovate; finally, the Doers, who make it all happen.

Content: Quotation | Source: Accenture | Subjects: Corporate Governance, Human Resources, Management, Organizational Behavior

The ranking of companies and business leaders has become something of a cottage industry in recent years. But what do they tell us about anything? Quite a bit, it turns out. You just have to learn to read between the numbers.

Content: Article | Source: INSEAD Knowledge | Subject: Corporate Governance

Almost faster than you can say mark-to-market accounting, management controls disappeared once Jeff Skilling became CEO of Enron. The rest is sad history and a shareholder’s worst nightmare come true. These authors document the subversion of Enron’s management controls and suggest the lessons managers can learn from the worst financial collapse in U.S. corporate history.

Content: Article | Authors: Clinton Free, Mitchell Stein, Norman Macintosh | Source: Ivey Business Journal | Subjects: Corporate Governance, Management, Organizational Behavior | Company: Enron

Numerous companies’ attempts to engage directors in risk management have failed either because those attempts themselves were not properly conceived or directors – and the companies – lacked specific tools to meaningfully involve directors. These authors advance three highly practical and effective tools that will enable boards to make that meaningful contribution to the risk management discussion.

Content: Article | Authors: Alex Wittenberg, Tom McDowell | Source: Ivey Business Journal | Subjects: Corporate Governance, Risk Management

Most boards should pay more attention to marketing governance to accomplish two main benefits for the company: shareholder value enhancement and the effective management of those emerging and future risks which marketing might affect. This article discusses the linkage of marketing to shareholder value and risk, and notes important areas for boards of directors to consider if they are to achieve clearer insight and better … [ Read more ]

Content: Article | Author: Ian Gordon | Source: Ivey Business Journal | Subjects: Corporate Governance, Marketing / Sales

[In 1949], I attended a meeting of business leaders. I suggested at the meeting that management people had a responsibility beyond that of making a profit for their stockholders. I said that we … had a responsibility to our employees to recognize their dignity as human beings, and to assure that they should share in the success which their work made possible. I pointed out, … [ Read more ]

Content: Quotation | Author: David Packard | Source: Prism (Arthur D. Little) | Subjects: Corporate Governance, Social Responsibility (ESG)

Business leaders who achieve extraordinary short-term financial gains for their companies often become celebrities. But how does a company secure long-term value for their shareholders, and how does this correlate with CEO leadership? More specifically, what do we know about the importance of effective succession management?

Content: Article | Authors: Chip Snively, Fred G. Steingraber, Richard Magjuka | Source: Kearney | Subjects: Corporate Governance, Succession Planning

In the wake of corporate scandals, many companies are looking more closely at how to manage business conduct worldwide. Realizing the complexity of this issue, Harvard Business School professors Rohit Deshpandé, Lynn S. Paine, and Joshua D. Margolis decided to evaluate standards of corporate conduct around the world—one of the most daunting research projects the three faculty have undertaken

Content: Article | Author: Carmen Nobel | Source: Harvard Business School (HBS) Working Knowledge | Subject: Corporate Governance

Directors may not be all that independent, but their savvy advice often pays off.

Content: Article | Source: strategy+business | Subject: Corporate Governance