What Companies Are Good For

Excellent discussion by Edward Hadas about using an Aristotelian perspective to consider this question that is so central to anyconsideration of corporate governance issues.(From Reuters – By Edward Hadas May 2, 2012) –

The debate on executive pay is often just a shouting match, in part because there’s no agreement on what bosses are actually paid to do. The “shareholder value” approach provides a simple answer, but one that it is both practically and morally wrong. Aristotle had better ideas.

Citigroup’s shareholders recently voted against the pay package of Vikram Pandit, the bank’s chief executive. In Europe, the boards of Barclays, Credit Suisse, Aviva, Man Group and Xstrata are in similarly hot water. Many think the key is to link rewards to success. But what exactly does corporate success mean? What is Pandit being paid to do?

To read the article:
http://blogs.reuters.com/edward-hadas/2012/05/02/what-companies-are-good-for/

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