Book contents
- Frontmatter
- Contents
- List of figures
- List of tables
- Preface
- Acknowledgements
- Part I Corporate crisis, leadership and governance
- Part II Rethinking the firm's purpose
- Part III The role of corporate governance in developing a respected company
- 4 Nature, goals and models of corporate governance
- 5 A mission-based view of corporate responsibility
- Part IV Leading and growing a respected company
- Bibliography
- Index
4 - Nature, goals and models of corporate governance
from Part III - The role of corporate governance in developing a respected company
Published online by Cambridge University Press: 06 December 2010
- Frontmatter
- Contents
- List of figures
- List of tables
- Preface
- Acknowledgements
- Part I Corporate crisis, leadership and governance
- Part II Rethinking the firm's purpose
- Part III The role of corporate governance in developing a respected company
- 4 Nature, goals and models of corporate governance
- 5 A mission-based view of corporate responsibility
- Part IV Leading and growing a respected company
- Bibliography
- Index
Summary
INTRODUCTION
Over the past few years, the business world has shown an increasing interest in the mechanisms that make corporate governance work. At the same time, good governance practices have been adopted by many companies and some governments have even passed guidelines to regulate basic issues in this area. Nevertheless, the challenge of corporate governance, both for companies and governments, is far from being efficiently tackled. In the cases that we present in this section, some basic problems of corporate governance are highlighted. They are related to executive compensation, the importance of large shareholders, mergers and acquisitions or the role of governments as shareholders in some companies. These and other dimensions make corporate governance an extremely complex issue, for which universal recipes do not exist.
The rage about executive compensation
On 10 July 2006, in the middle of a booming economy, Fortune magazine published ‘The real CEO problem’, an article that described in a lively way why some US companies' shareholders were outraged at the ballooning of executive compensation and why boards of directors and shareholders could not do more to stop the rot in a compensation system that seemed to be broken. The rage became furious in 2008 and 2009, when the financial crisis exploded, investment banks went bust and some CEOs were still making a lot of money while their firms were underperforming. The questions were: Is executive compensation efficient? Is it fair? Can boards of directors do something to tame the compensation monster?
- Type
- Chapter
- Information
- Building Respected CompaniesRethinking Business Leadership and the Purpose of the Firm, pp. 99 - 139Publisher: Cambridge University PressPrint publication year: 2010