In the midst of the financial sector meltdown, directors and executives are asking innumerable questions. One, in particular, seems central: “In our quest for pay for performance, have we—boards, executives, and shareowners alike—created pressure points that influence risk-taking behaviors in unintended ways?”
Risk is one of our favorite—yet most feared—topics. For starters, risk is not a bad thing. Taking risks and getting paid is at the heart of business. But to state what should be obvious, that is only true if we are taking known and intended risk. Therefore, the first question, even before you get to the nexus between executive ...