From Bushels Of Carats To The Stick
Warren Buffett feels (as I do) that it's been too easy for CEOs to risk their company's money and future because there's been no cost to those CEOs for failure; sometimes, just the opposite: golden parachutes and "More champagne, sir?"
Colin Barr writes for Fortune that Buffett thinks the bank accounts of CEOs running those too-big-to-fail banks should be put on the line:
The Obama administration last month proposed separating banks' proprietary trading activities from their federally subsidized deposit-gathering and lending ones. Other proposed rules would increase the amount of capital banks hold against losses and how much cash they carry to deal with a surge of withdrawals.But Buffett said there's a simpler way to cap risk-taking: Forcing lavishly compensated CEOs to take responsibility for assessing the risks at their firms -- and putting their own wealth at stake, to boot.
"It is the behavior of these CEOs and directors that needs to be changed," he wrote. "They have long benefitted from oversized financial carrots; some meaningful sticks now need to be employed as well."
The comment reflects a theme that has run through Buffett's letters to investors over the years: Shareholders are best served by managers who think like owners. More often, he has said, they are ill served by executives who instead pursue value-destroying mergers or pile up debt in a bid to boost returns.
Buffett, 79, is the controlling shareholder at Berkshire and has received $100,000 in annual salary for the past quarter-century. Since he took over Berkshire in 1965, the company's net worth has increased at a 20% compound annual rate.
So it's no surprise when he heaps scorn on the bankers who made tens of millions of dollars annually as they steered their financial supertankers onto the rocks. The four biggest financial "fiascoes" -- presumably including the bailouts of AIG (AIG, Fortune 500), Citigroup (C, Fortune 500) and Bank of America (BAC, Fortune 500) -- cost investors more than $500 billion, by Buffett's count.
Shareholders didn't cause those meltdowns, but "they have borne the burden, with 90% or more of the value of their holdings wiped out in most cases of failure," Buffett wrote. "The CEOs and directors of the failed companies, however, have largely gone unscathed."
Buffett wrote about this in his 2009 letter to his shareholders, excerpted at WallStreetPit.com:
"In my view a board of directors of a huge financial institution is derelict if it does not insist that its CEO bear full responsibility for risk control", Buffett wrote. "If he's incapable of handling that job, he should look for other employment. And if he fails at it - with the government thereupon required to step in with funds or guarantees -the financial consequences for him and his board should be severe.It has not been shareholders who have botched the operations of some of our country's largest financial institutions. Yet they have borne the burden, with 90% or more of the value of their holdings wiped out in most cases of failure. Collectively, they have lost more than $500 billion in just the four largest financial fiascos of the last two years. To say these owners have been "bailed-out" is to make a mockery of the term.
The CEOs and directors of the failed companies, however, have largely gone unscathed. Their fortunes may have been diminished by the disasters they oversaw, but they still live in grand style. It is the behavior of these CEOs and directors that needs to be changed: If their institutions and the country are harmed by their recklessness, they should pay a heavy price - one not reimbursable by the companies they've damaged nor by insurance. CEOs and, in many cases, directors have long benefitted from oversized financial carrots ; some meaningful sticks now need to be part of their employment picture as well."
Full text of letter is downloadable here: http://www.berkshirehathaway.com/letters/2009ltr.pdf
No "meaningful sticks" are forthcoming. The fat cats have an impenetrable defense: They never forced anyone to buy stock. People invest in whatever they want. If you buy into an enterprise that plays those games, you oughta wipe your own tears away.
Crid [CridComment at gmail] at February 28, 2010 2:31 AM
The Obama administration last month proposed separating banks' proprietary trading activities from their federally subsidized deposit-gathering and lending ones. Other proposed rules would increase the amount of capital banks hold against losses and how much cash they carry to deal with a surge of withdrawals.
danger ...
If their institutions and the country are harmed by their recklessness, they should pay a heavy price - one not reimbursable by the companies they've damaged nor by insurance. CEOs and, in many cases, directors have long benefitted from oversized financial carrots; some meaningful sticks now need to be part of their employment picture as well. (Buffet)
danger, again ...
You look at a free market operation, and decide the CEOs haven't paid the appropriate price.
Obama is right there to impose his nanny state philosophy, and the government octopus is in your banker's shorts, but guess what? the government is in your shorts too.
Suddenly, the collateral your banker said would be fine to launch your small business is no longer enough. But Obama is making special rates available for you as a small business.
The difference now is that GOVERNMENT is actually giving you the price break in loan rates, and you, the taxpayer, are footing the bill to make Obama look good. Know what happens to the natonal debt with this kind of chicanery?
Ken at February 28, 2010 3:19 AM
>>>If you buy into an enterprise that plays those games, you oughta wipe your own tears away.
Based on the assumption that all such information is easily available plus contains no layers of complexity? That all investors, which the country most definitely needs right now, are able to ascertain everything? Where we can expect most investors to be prudent enough to keep companies honest and not sending our national financial health off a cliff?
Or we could make CEOs tie much of their huge financial gains to the company, as well as shareholders, they are responsible for? And in the process maybe help avert this every so often cycle of subterfuge that particular industries keep hurting us all with?
Huh, tough choice there.
TW at February 28, 2010 3:46 AM
Well, just handing out money for bailouts was among the stupidest things the Bush and Obama administrations have done, since those bailouts paid for undeserved bonuses.
My suggestion would have been, if we must bail out those organizations, some bulldog of a government official goes along with them, and he controls how the bailout is spent. Every penny of the bailout that gets spent does so with his approval. Paychecks for employees? That's a go.
Bonuses for CEOs? You don't get a bonus for a bad performance.
Patrick at February 28, 2010 4:45 AM
>>>Bonuses for CEOs? You don't get a bonus for a bad performance.
I believe this is what WB was, in part, getting at. That in general -- not just government bailout institutions -- CEO's should get fabulously wealthy when their companies do well and stay doing reasonably ok (or at least don't go under due to monumentally bad decisions). Currently, fabulous wealth is a given once you accept the position regardless of the company's performance (as long as your face isn't plastered on TV....then becoming a target of the government's dog and pony show of 'we're doing something about this').
TW at February 28, 2010 5:21 AM
I'd love to see this across the board -- CEO pay tied to actual company performance, as my pay is tied to actual performance. If I get lazy with the writing and research, I'll get fired by papers; I won't get a home in Bel Air with a moat.
Amy Alkon at February 28, 2010 5:46 AM
Given how many pornos have been filed in that house with the moat would you really want it if you could afford it?
Imagine what that place looks like under blacklight
lujlp at February 28, 2010 6:54 AM
That should have been filmed, not filed
lujlp at February 28, 2010 6:55 AM
Almost all the stock I own is through mutual funds in my 401Ks. I don't even get a vote. The votes I do get are meaningless for the most part - I don't remember any measure opposed by any board ever being accepted.
Since most of our retirements are now tied up in the stock market, and the risks are borne by us whether we want them or not, this measure is overdue.
I'll note that the now retired CEO of my former employer was lavishly compensated. The company consistently outperformed the market and the competition during his tenure, and I don't begrudge the man a nickel. He took a lagging company and made it perform.
MarkD at February 28, 2010 7:04 AM
Is there a bigger hypocrite than Warren Buffet? I don't think so.
He's complains that he pays a smaller tax rate then his secretary.
Of course he does. He runs the company and he gets to decide how to pay himself and his secretary. He pays her with a salary and himself in stock. Why doesn't he take a salary if it bothers him so much?
He's all in favor of raising the estate tax but he's giving away almost all of his estate to Bill Gates with the specific instructions that the money be shielded from taxes.
His last big deal for the railroad was structured to shield his shareholders from higher tax rates. All his deals take advantage of tax shelters if they can.
He's made his fortune by picking up companies on the cheap, some of which have had to be sold at a discount when the owner has died and the family can't afford the estate taxes.
Warren thinks the estate taxes should be higher.
During the financial crisis when Paulson was beating bankers about the head + shoulders and forcing them into deals to "save the country" Warren got several phone calls and he said thanks but no thanks. Until he was able to rape Goldman on the deal he did do.
Warren's a swell guy, all right. He's a real champion of the common man.
sean at February 28, 2010 8:19 AM
So Mr. Buffet isn't Santa. Is he wrong about CEO duties?
Don't think so. And Crid is right. Handing your money to people to do something you don't understand is foolish.
I shouldn't even hand money to myself!
Radwaste at February 28, 2010 8:33 AM
Sean, I think you are a bit unfair. Warren Buffet says he is for higher estate taxes; given his track record, I believe he genuinely is. However, as long as estate laws are written the way the are, it would be simply stupid for him to not take advantage of them.
As far as I am aware, he does not pay himself in shares. The last I heard he was still living in the same middle-class house that he bought 40 or 50 years ago. Granted, he lives for his business, and I'm sure that he travels in private jets, stays in the best hotels, etc - all as a business expense. Given the success of his company, this is entirely fair.
The one aspect of the problem not addressed above is the fact that the upper levels of managements are a kind of club: I'll sit on your board if you'll sit on mine, us against the evil world that doesn't understand why we need a second yacht and third ski chalet.
I'm generally against government regulation, but it does have a role in reigning in the excesses of capitalism. For example: Anyone taking on a board or CEO position could be required to invest a portion of their personal wealth in the company, not redeemable for at least three years after they leave their position.
bradley13 at February 28, 2010 8:48 AM
"Handing your money to people to do something you don't understand is foolish."
Agreed. Nobody from my generation (X) ever thought we would get Social Security. None of us are getting pensions. That leaves the stock market. So here we sit, still believing in the myth of retirement, socking 10% of our money into 401ks each month. Putting it in the hands of someone else, like we're "supposed to." We can't very well laugh at people who believed in the pension myth, can we.
No, it's the myth of retirement itself (like McMansions, pricey college degrees, and cars that take a year's salary to pay for) that is the real bubble. Most people simply don't make enough money to spend the last 25 years of their lives loafing. Five years, maybe, or ten - but not entire decades. Adjust your expectations accordingly, wipe away your own tears, and effing get on with life.
Pirate Jo at February 28, 2010 8:53 AM
In most of those cases, people receiving bonuses were not the people who drove the business into the ground. If your company has five divisions, and four do great and the fifth loses the company's shirt, why do the workers in the four productive divisions not deserve their bonuses? (They don't always get them, because of practical reasons, but in this case the government happily provided billions of dollars, making the banks able to pay those bonuses.)
Though I am reluctant to endorse government intervention, the above makes a strong case for requiring companies to split up into those various divisions. If the hypothetical five division company was actually five different companies, the one that lost big would have been free to go bankrupt (or be bailed out) without directly affecting the four successful divisions.
Pseudonym at February 28, 2010 9:07 AM
> Based on the assumption that all such information
> is easily available plus contains no layers of
> complexity?
[1.] Should someone afraid of "complexity" be taking any risks at all? Wouldn't it be simpler to not get out of bed in the morning? Do you seriously believe that a righteous, effective marketplace is one where no one, of any skill level, will ever be challenged by "complexity"?
[2.] Ditto "easy": How convenient do you want investment to be? Do you think if it's easy it will be good for anything else?
(Answer those points carefully: If you respond like a child, as Obama hopes you will, he'll do his God Damnedest to make the world work like that. And then you'll be eff you see kay fucked. DC is already the financial capital of America.)
I don't understand why you folks keep saying "there needs to be a rule where it works like this-or-that for CEO's". If you want a rule like that, invest that way... Go ahead and do it on your own. If enough people are impressed with your portfolio, that's how it will be done.
Comments like LW's offend because they suggest that we need the world to be built so that the little guy can't get hurt... Even when the little guy has no business playing in the middle of the Street anyway.
For fucks sake:
> Though I am reluctant to endorse
> government intervention...
Note the balls, people.
Crid [CridComment at gmail] at February 28, 2010 9:54 AM
What Buffet is asking for is the way it was done for most of the 20th century, up until about 15 years ago. Compensation for CEOs, officers, and other top employees was partially or mostly in stock options. If the company's stock drops off the table, the options are worthless. That's a pretty good motivator.
So what happened? Well, it changed about fifteen years ago, the last time the leftists decided to have a fit about executive compensation! They got all upset about all those people making money off of the stock they held in their companies! And the leftists weren't getting enough of it given to them! Waaaah!
So in the mid-90s, there were a slew of new regulations that essentially made it illegal to reward employees with meaningful stock options. When that happened, companies had to start compensating executives with mostly cash and safe forms of investment. Not only did that drain company treasuries, since the execs were now having to be paid with current instead of future value, but it also decoupled compensation from performance.
I'm convinced that a lot of what we've seen over the past two years has been the direct result of of the stock-options elimination.
Cousin Dave at February 28, 2010 3:36 PM
>>>[1.] Should someone afraid of "complexity" be taking any risks at all? Wouldn't it be simpler to not get out of bed in the morning? Do you seriously believe that a righteous, effective marketplace is one where no one, of any skill level, will ever be challenged by "complexity"?
A) the country needs all the investors it can get. B) Every investor should or will be fully informed is an example of a pie in the sky reality. C)Prudent regulation does not equal a sanitized, risk free, proletarian utopia (not by a long shot). Tying lavish CEO wealth to corporate performance is a benefit to us all as individuals, corporations, and as a collective. It's of similar logic where a union worker's performance SHOULD be tied to his employment status.
>>>[2.] Ditto "easy": How convenient do you want investment to be? Do you think if it's easy it will be good for anything else?
Yes. More investors has a direct positive impact on all our financial healths, and making it easier has that benefit. Does this mean every benefit would be positive? Doubtful. Most of life is a choice based on weighing the positives and the negatives.
>>>(Answer those points carefully: If you respond like a child, as Obama hopes you will, he'll do his God Damnedest to make the world work like that. And then you'll be eff you see kay fucked. DC is already the financial capital of America.)
How "Obama" wants me to respond is not relevant to me (awesome usage of "how Obama wants you" though). I didn't vote for Obama, I care little how a politician wants me to "write", and I strongly disagree with the far left, european style, over regulated way of thinking (among other things). I also disagree with the polar opposite idea (that all regulation is bad/no regulation is best). Should we rid ourselves of all aspects of the FDA, FDIC, SEC, EPA, etc? Should everyone have been self informed about the manufacturing processes in China? Or Company X's practice of talking with Company Y about what is the best price to set? The hedging of financial institutions? Or Company Z's (let's say Enron's) highly complex financial practices? Is Enron an extreme example? Yes. But shouldn't investors sink or swim with Enron too? Shouldn't they have done their homework about the accounting practices? Should a financial bubble bursting be the sole arbiter of corporate and investor success with Enron (or lack of success), or should prudent regulation help shape this very complex game? And when answering that you should absolutely positively assume that many many millions of people lack the cognitive reasoning ability of you (not a dig. I mean that sincerely).
>>>I don't understand why you folks keep saying "there needs to be a rule where it works like this-or-that for CEO's". If you want a rule like that, invest that way... Go ahead and do it on your own. If enough people are impressed with your portfolio, that's how it will be done.
Because that supposes the world works in such an ideal and harmonious way. Where that which is a net negative is almost always avoided by nearly all (therefore I will never be negatively impacted by things not in my control whatsoever).
Capitalism, in part, is a race to the bottom. It works well too IF regulation helps to keep the bottom from being a place that has a clear net negative effect. If you feel the bottom is a place completely defined by the purchasing (and research) habits of customers? I just don't agree that is the best way. I believe the bottom is defined in large part by consumer habits along with prudent regulation (such as tying a CEO's lavish wealth to the performance of their job).
You might not agree with my way of thinking. However, I think their is sufficient logic to make the argument. So I don't understand why you displayed anger and lashed out. Dare I say I didn't understand the "complexities" of your anger?
TW at February 28, 2010 3:38 PM
"Warren Buffett feels (as I do) that it's been too easy for CEOs to risk their company's money and future because there's been no cost to those CEOs for failure;"
I agree, but then why did he come out and back Obama in the last weeks of the campaign even though he voted to bail out AIG?
Feebie at February 28, 2010 6:26 PM
> A) the country needs all the
> investors it can get.
This isn't true. It's naive, fearful, unsubstantiated, cynical and flippant.
> B) Every investor should or will
> be fully informed is an example
> of a pie in the sky reality.
I'm 99% sure you're wrong, but your writing isn't clear, so I probably couldn't prove it in court... Unless you're making my side of this argument, in which case thanks anyway, but everything's under control over here, so please keep your racquet on your own side of the net.
> C)Prudent regulation does not
> equal a sanitized, risk free,
> proletarian utopia
Implicit in your wording is the presumption that there's been insufficient regulation, whereas Cousin Dave (and many, many others) convincingly argue the opposite. (This is the part where Obama starts touching himself when listening to you: 'Hey, Rahm! Nancy! I think we should double down!')
> Tying lavish CEO wealth to
> corporate performance is a
> benefit to us all as
> individuals
Again — If you want to invest in companies that tie CEO wealth to corporate performance, then go ahead and do so. No one's stoppin' ya, babe... Free country. I mean, aren't you arguing that important resources are being from diverted from the employees and investors in order to pay off the management? Why would you, as an investor, put up with that?
> More investors has a direct
> positive impact on all our
> financial healths
Says who? Investment money is not the problem... There are BILLIONS of people who want to put money into something that'll grow. The problem is that they're not picking their investments thoughtfully.
> How "Obama" wants me to respond
> is not relevant to me
It's relevant to him. He's playing you like a fiddle.
> Should we rid ourselves of all aspects
> of the FDA, FDIC, SEC, EPA, etc?
> Should everyone have been self informed
> about the manufacturing processes in
> China? Or Company X's practice of
> talking with Company Y about what is
> the best price to set? The hedging of
> financial institutions? Or Company Z's
> (let's say Enron's) highly complex
> financial practices? Is Enron an
> extreme example? Yes.
I quoted all that to show that you're rambling. And I hate it when people play the Talk Show game without asking, so they can interview themselves as Jay or Conan would a starlet on late night TV, answering their own questions: "Yes", you say. That is so rude.
> when answering that you should
> absolutely positively assume
> that many many millions of
> people lack the cognitive
> reasoning ability of you
1. Never flatter me until you're asked to do so... And don't worry, that day will come. Be ready.
2. All reasoning is cognitive.
3. All people have "reasoning ability". Some folks are just fucking wrong about stuff, but that doesn't mean they should just sit still and wait to be told what the truth is, not by me or by you or Ann Coulter or Daily Kos or any other authority. There are very few intellectual challenges that aren't better handled through courage and humility than by submission to smartypants blowhards who want to tell us how the world works. Got that? Everyone has seen things that other people haven't seen, and has therefore acquired insights which any genius should envy. There's more wisdom in the minds of any two fools than in the skull of the smartest man who ever lived.
It's really, really important that you take that last point to heart.
You apparently think capitalism has separated ownership from management & production merely to spread the wealth from the enterprise. This is not so. Stock markets can certainly bring money to people who are unprepared to manually participate in distant, complicated ventures; but just as importantly, these markets focus the diverse wisdom of the investors into the projects most likely to reward the community.
This concentration of broadly-held intelligence may well be the greater function of the bourses. Investors presumably are people who've earned a little pocket money of their own, and therefore ought to have their opinions considered with respect. Nobody, nobody, nobody said they should be able to invest without asking how their money will be spent. Favorite blogger/author Postrel once put it like this (heavily paraphrased): A price isn't just a number, and it isn't just a weapon by which a richer person abuses a poorer one. A price is a piece of information about what the world is like. Brilliant men and stooges should both consider that data humbly.
I've been hurt in two bubbles in just one decade. (Maybe twelve years, actually.) Almost everyone reading these words has been burned in one, or the other, or both. Not trying to boast, but I actually came out a little ahead each time... That's not much comfort, because if I had been courageous and attentive, I could have MADE a lot of money both times. That's a really important thing for people to understand. I knew the tech bubble was bullshit, but didn't have the nuts to counter-invest. Same with the finance/real estate crisis– If I'd had the courage of my convictions when I finally saw what was happening, I'd be driving a Porsche today instead of a Scion.
The point of selling stocks in these companies is not to make it easy for a foolish, inattentive investor (as I have been, and probably as you have to been) to make money: The point is to project our intelligence and diligence into the operation of these companies.
Meanwhile, who knows how much money anyone is worth? Why would you trust the government to know how much a really talented executive should be paid? Consider the best corporate performers of our lifetime: Gates, Jobs, Grove, and so on... Would any government in the world EVER have paid them what they're worth? And did their success interfere with their performance? (Of course not.)
> I don't understand why you
> displayed anger and lashed
> out.
Because you piss me off. Not for the being dumb part, because all of us have that.... But for being cowardly and not taking responsibility... For implying that the government should and COULD watch our for your interests more carefully than you, a (presumably) grown man, can do for yourself.
Crid [CridComment at gmail] at March 1, 2010 12:40 AM
It seems to me the thing to do would be to go after the board as they are setting the compensation. They way they are doing it does not appear to meant their Fiduciary responsibility to the stock holders.
The Former Banker at March 1, 2010 1:10 AM
Let me put it another way. Rewarding investment will never be like other consumer experiences. You can't say "the fries are too salty" like you can at McDonald's. This is investment. You're were supposed to be watching it so closely that you knew how things were going to go.
Consumer experiences are something that America is really good at. But they're not how every kind of exchange is supposed to go.
Crid [CridComment at gmail] at March 1, 2010 2:24 AM
LOL, Crid, you'll never know how much I needed a good laugh (and I mean that). You delivered the goods. In the reverse, this was like the scene in Monty Python where the guy pays to be pissed off. I didn't get paid though.
>>
Actually that is "naive, fearful, unsubstantiated, cynical and flippant". You have no idea of my investing habits (or other habits with the possible exception of choice of blogs I visit, poor writing, cell phone habits). And I think there is even enough evidence of that ignorance to prove it in court.
I'll keep it short (and avoid further unclear writing -- forgive me, I'm that dreaded nightmarish product of a floundering public educational system that we all hear about on TV) I'll just say this....allowing your emotions to get the better of your thought process is usually not a good way to proceed. For example, writing "All people have "reasoning ability"" in response to me saying people have less reasoning ability than yours.
Listen, you obviously have a strong visceral dislike of regulation or too much regulation. I dislike too much regulation also. "Too much" is relative though. If you feel too much is where regulators try to link CEO's lavish wealth to their company's performance? Have it at! I'll stick to my cowardly, dumb, apparent poor tennis skills, unclear, naive, etc etc opinion. Never forget this....ignorance really can be bliss (just not in the market).
TW at March 2, 2010 2:52 AM
I agree with buffeet, there is no need to regulate incomes and salaries, all we need to do is hold management accountable for their mismanagement.
If a company breaks the law, fine the managers, not the shareholders (the "company"). We do not hold managers accountable nearly enough.
People do not realize that large corporations LOVE regulation, they'd much rather have regulation - which is a shield to getting sued - than suffer under the barrage of lawsuits they would if people and shareholders had the ability to hold them accountable. "You can't sue me for poisoning your kids, we followed FDA regulations, see right here!", etc. Especially since large corps write the laws for congress, at the expense of the public and small competitors.
Corporations aren't "people" in the sense they have no emotions or reasoning. Only when there is a sense of ownership and responsibility towards others will managers behave. Laws and regulation don't make them behave it actually makes them behave worse.
plutosdad at March 2, 2010 6:11 AM
Amy Alkon
http://www.advicegoddess.com/archives/2010/02/28/from_bushels_of.html#comment-1699122">comment from plutosdadIf I bought stock, I would buy stock in companies that hold management accountable in some meaningful ways. I'm not looking for government regulation on this -- I'm looking for companies to make it their culture.
Amy Alkon at March 2, 2010 6:19 AM
plutosdad writes: "You can't sue me for poisoning your kids, we followed FDA regulations, see right here!"
Actually, that's not a defense. Except for a few specific cases, courts have always held that meeting federal regulation does not preempt lawsuits at the state level. Here's a particular case: the drug maker Wyeth was sued by someone who was harmed by a drug made by the company. The plaintiff claimed that the drug's warning label was insufficient for the use that injured her. Wyeth counter-claimed that the specific wording of the label was mandated by the FDA, and that in fact the FDA had barred the company from applying a more inclusive warning that would have covered the situation that harmed the plaintiff. The court ruled that even the fact that the FDA had mandated the specific wording did not shield Wyeth from being sued for not including additional wording.
Large established companies do indeed love regulation, but the reason they do so is not because it shields them from lawsuits -- it doesn't, at least not in the U.S. -- but because it poses barriers to entry for would-be competitors.
Cousin Dave at March 2, 2010 7:39 AM
Ah hell, busted a tag. Sorry about that.
Cousin Dave at March 2, 2010 8:55 AM
>>>If I bought stock, I would buy stock in companies that hold management accountable in some meaningful ways. I'm not looking for government regulation on this -- I'm looking for companies to make it their culture.
I'm with you on that idea Amy. If the corporate culture was as such, the regulators can forgetaboutit. However, that culture does not exist and I believe it will never exist. Corporate culture is ultimately a race to the bottom (ultimately just one simple rule: produce profit at as fast a rate as possible). It's a good system provided the bottom is not bottomless. That's where prudent regulation comes in.
Also, can we know management is accountable? What happens in the back boardroom won't be made public unless it has to. Is current corporate culture holding executive management accountable or do they just get moved on to something else (by the cross company board - exec management relationship?) with a 25 or 50 or 100 million golden parachute regardless of results?
TW at March 3, 2010 12:37 AM
Sumbuddy close the window... There's a draft.
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