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corporate governance
by leon on August 3, 2006

Charles Elson, director of the John L. Weinberg Centre for Corporate Governance at the University of Delaware talks about these issues and more in this interview in Business Ethics.
Elson says that because of Sarbanes-Oxley and new york stock exchange listing rules, boards are a lot better now than they were a few years ago. But they still have a long way to go.
And predictably, one of the crunch issues is compensation. Paying a manager as if he were an entrepreneur is wrong, he says, because a manager or chief executive does not face the same kind of risk as an entrepreneur.
As for the SEC's new disclosure rules on compensation, they could actually result in pay going up, he warns.He proposes having directors who are large shareholders themselves, so that they are taking the same sort of risk as other shareholders.
But how big a shareholder should a director be? If it's too big, far more than normal investors whose interests the directors are supposed to be safeguarding, there could be some ethical conflicts, particularly if the director has other interests.
Still, the interview does point to some interesting directions for corporate governance and it's worth checking out.
Permalink: Corporate governance: future directions
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Mr Wong
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Companies are stupid paying CEOs entrepreneurial-type salaries because CEOs are not taking the same risks as entrepreneurs. And the Securities and Exchange Commission’s new rules on disclosure for compensation are likely to see executive pay go UP. All...
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Companies are stupid paying CEOs entrepreneurial-type salaries because CEOs are not taking the same risks as entrepreneurs. And the Securities and Exchange Commission’s new rules on disclosure for compensation are likely to see executive pay go UP. All...
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