Mark Van Clieaf recently sent me an article he’s written (“Executive Accountability and Excessive Compensation: A New Test For Director Liability”). He and his colleagues have done a study of 700 Fortune 500 companies — representing 80% of the US stock market — and found some troubling things about CEO compensation and even the entire executive team and Board. It will appear in Compensation Standards and should be available through the MVC Associates International website. Corporate Governance Advisor will publish it in November of this year.
Van Clieaf’s article has great data and strong recommendations that can be implemented. If not easily, at least doable.
He also raises an issue in that email:
we also need to distinguish between
Time-span for planning and
Time-span for decision discretion ( accountability )
two separate measures
I have a lot of trouble with this. I know that Elliott Jaques said that delegating the planning function was anathema (OK, he just said it was stupid and shouldn’t be done) but I know that it is not entirely agreed upon by others. Solaas, in his article “Why Is RO So Hard to Learn?” talks about Jaques comments to him during the late 1990s about this issue.
Also, just to put it somewhere, this lovely story from “Engineers as Soothsayers” by Bob Colwell from IEEE Computer:
During a meeting with an [Intel] executive in 1996, he siad, “You hired an extra 10 heads [who were experts in the terrible problems that other companies had in implementing multiple processor (MP) architectures in their chips] for the MP feature on P6, and it came out right.” I thought, Yes, that’s right, you should praise my foresight. I saved you a lot of money, and you’re lucky you have me on your team.
But then he said, “Looks like you didn’t need them after all.” I was staggered. What? No! They are the reason it came out right! He just smiled. I wasn’t smiling.
Why is it that you have to create crises on projects to prove that the steps that you took to be able to respond to them are paying off? I remember getting very low marks as a project manager by my direct bosses because I never had any crises and others did. They were seen as heroes. I was seen as getting lucky each time. Luck I made myself by getting the right people in the right place. My projects were always within budget and ontime. Always. Of course, having to plan for someone else to take over the project always gives me lots of room to manuever…