Many people have analyzed the meltdown of platinum-branded financial institutions, amazed at how quickly they went from supposedly sound and powerful to being taken over or filing for bankruptcy. The lessons to be learned, and hopefully not forgotten, are far-reaching at several levels. Boards of directors can look to recent words of Jim Kristie, editor […]
Richard M. Steinberg
Posted inBoards & Shareholders
Will Shareholder Proposals Benefit or Destroy?
The resentment and anger over recent corporate performance, especially in the financial services sector, has gone from bubbling up to boiling over. Individual and institutional investors seeing share prices plummet as their companies have been brought to their knees and watching the ensuing credit squeeze and economic recession want to see changes in how companies […]
Posted inFrom the Archive
What Boards Should Know About Groupthink
Last month’s column described the dangers of “keeping up with the Joneses” and how businesses seeking to do so have suffered disastrous consequences. I mentioned two corollaries: the risk of blindly following supposed best practices, and of buying into “groupthink.” We explored the former risk in detail last month; this month I want to turn […]
Posted inBoards & Shareholders
A “Best Practice” Lesson: Don’t Follow the Herd
When you work with senior executives and boards of directors as long as I have, troubling behaviors that directly affect corporate performance become all too clear. And a number of major corporate failures we’ve all seen in the news can be traced back to these behavioral characteristics. I’ve coined names for these bad habits. Worst […]
Posted inInternal Controls
The Simple Truth Behind the Complex Idea of Risk
Perhaps nothing in business circles today generates more heated debate than risk and risk management—not only in financial institutions, but also in every industry, and from the lowest manager level to the boardroom. We all know something went disastrously wrong in how risk has been managed, to the painful realization of directors, senior executives, and […]
Posted inEthics & Culture
Corp. Culture: Who Failed, Who Got It Right
The concept of corporate culture is difficult to get one’s arms around. We know it exists within every organization, although trying to identify or define it is challenging. That notwithstanding, executives who have been through the “wars” know well that shaping a company and its people to the desired culture plays a major role in […]
Posted inBoards & Shareholders
Governance Challenges Facing Corporate Boards
Not long ago, I was interviewed for RiskCenter and the Global Association of Risk Professionals, where I had the opportunity to discuss a range of governance challenges faced today by boards and management. As a change of pace from my usual monthly essay, I’m going to share some of those thoughts again here in an […]
Posted inFrom the Archive
When Executives Discuss ERM Challenges
Recently I had the privilege of leading a forum of senior executives experienced in risk management in a discussion of the challenges of developing, implementing, and gaining the benefits of ERM. The event was hosted by OpenPages*, a maker of governance, risk, and compliance software, and attended by executives of large companies from a cross-section […]
Posted inFrom the Archive
CEO Pay—Can We Get It Right?
Editor’s note: This is the second in a two-part series on the subject of CEO pay. Last month’s column examined shareholder anger surrounding the dramatic rise in CEO pay and outlined how executive compensation reached the sorry state where it is today. We also discussed why many shareholders are clamoring that pay is too high, […]
Posted inFrom the Archive
Tracing the Past and Future of CEO Pay
Editor’s note: This is the first in a two-part series on the subject of CEO pay. Let’s start with the obvious: Shareholders are mad about the state of CEO compensation. Some are as mad as the news anchor in the film “Network,” screaming, “I’m mad as hell, and I’m not going to take it anymore!” […]
