Loss-making subsidiaries. Anyone who can effectively work the phrase “torpid portentiousness” into an essay is worth a read. Please see this Mark Steyn piece, from National Review Online, comparing GM to the relative titan, Bed, Bath and Beyond – and more. Many thanks to Michael Wade for the tip.

Dull diligence. Would you have thought that economists might concern themselves with the presumption of a relationship between good manners and tailoring, and integrity and intelligence? Please see this concise article from The Economist describing the codependence that sometimes exists between the honest consumer – both individual and institutional – and the con artist, the surprisingly big fish caught in this most recently discovered net, and what we might want to do about it.

Whistling past the graveyard. One thing you might not want to dare do about malfeasance you witness is blow the whistle on it. Please see John Phillips for a chilling report on the disturbing things that can happen to you – and the disturbing places where they can happen.

Keeping obnoxious options open. And for all the risky whistle blowing, what do we get? Please stop over to see what Miki Saxon uncovered about a special provision in the Siemens settlement with the US government – and the unhappy reason for it.

The antidote to all that. For all the depressing events we see going on around us, and the poor examples driving them, it’s never quite as bad as it seems. After all, we turned out alright, didn’t we? For all our good reasons for concern, we have equally encouraging ones for hope. Please stop over to see Michael Wade’s U.S. News and World Report article about some of his. When you do, you will undoubtedly recall some of yours. And when you do that, consider how you might pass them along.

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Technorati Tags: Mark Steyn, National Review Online, GM, Bed, Bath and Beyond, Michael Wade, economist, integrity, intelligence, consumer, con artist, malfeasance, John Phillips, Miki Saxon, Siemens, settlement, US, government, U.S. News and World Report

It has long been remarked that there is an oddly converse correlation between economic cycles and enrollment in MBA programs. When business is down, the business schools start filling up with managers seeking to pad their credentials. And so as we enter the current global crisis we can probably expect a boom in MBAs within a year or two – just in time to hop the next economic train through town.

But will they be driving the coming boom, as so many imagine, or setting up the following bust?

Increasingly, academics themselves are joining the ranks of those critical of the MBA degree. The most famous of them is Henry Mintzberg, a business professor himself, and author of “Managers not MBAs” (see review here). Mintzberg is concerned not only that such programs educate people in the wrong things, but that they promote the harmful impression of producing trained managers ready for positions of authority and responsibility, into which they should be placed over the heads of people who have put in the work learning the job.

The late Professor Sumantra Ghosal, of the London Business School, shared these concerns, and was specific about their scope. He chided management academics for allowing “physics envy” to develop into a caricature of science that produced pretentious theories that were actually, in his view, quite simply void of real knowledge.

In particular, he criticized certain concepts – still widely popular – developed by certain Harvard professors, that he argued were based on models of essentially negatively mechanical managerial behaviors. He feared that these models were not only false, but that they had the effect of producing the very negatively mechanical behaviors, and the consequences attendant on them, that they posited. As evidence, he ruefully noted the large numbers of executive graduates of such management-school educations that played prominent roles in the major business scandals of a decade ago.

Yet another academic, Professor Jeffrey Pfeffer, of Stanford, suggests that these two don’t know the half of it. He largely agrees with the source, nature, and shape of the problem, but is concerned that it might be behind a more systemically widespread undermining of managerial energy and integrity than we know. He has pointed to evidence of this in the form of an apparently positive correlation between MBAs in senior management and certain types of regulatory violations.

Undoubtedly, there are other sides to this story. Who knows, for example, how many MBAs from similar programs are in companies that are succeeding by dint of sheer hard work, intelligently planned and ethically executed? But then, who knows whether or to what extent such behavior originates in the degree or in the degree-holder?

So, when you hire a manager, perhaps you should ask more than just about educational background: Ask the candidate’s own views about the role of management in business and society, and of the part he or she expects to play in the real world, in your organization, among your staff.

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Today’s tip: For a current working student’s explanation of what he expects is going to be the value for him of an MBA, please see this introduction to an upcoming series on the topic in Business Week.

For a strong discussion of the broader question of whether business is more or less prone to ethical problems than society in general, you will want to see these essays, published on their jointly-authored blog, by Judge Richard Posner and Professor Gary Becker.

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Technorati Tags: MBA, business, manager, academic, Henry Mintzberg, professor, authority, responsibility, work, Sumantra Ghosal, London Business School, management, physics, science, knowledge, Harvard, professor, education, scandal, Jeffrey Pfeffer, Stanford, integrity, education, society, organization, Business Week, Gary Becker, Richard Posner

When times are tough, we talk tough. We sound the call to arms, announce the equality of all before the greatness of the challenge we face, and declare our devotion to everyone who helps shoulder the burden. It can be a thrillingly satisfying display of our great-hearted spirit, our boundlessly magnanimous condescension.

A classic example of this highly contrived concern and regard of “leaders” for their “followers” is effectively spotlighted by James Shapiro in his excellent work, “A Year in the Life of William Shakespeare.” In a famous and much quoted passage from “King Henry V,” Shakespeare has Henry addressing his troops before the Battle at Agincourt:

We few, we happy few, we band of brothers.
For he today that sheds his blood with me
Shall be my brother; be he ne’er so vile,
This day shall gentle his condition.”

The battle (1415) was a horrifically one-sided victory for the English. John Keegan tells the story with brutally close-up, blow-by-blow detail in his brilliant study, “The Face of Battle.” Despite being greatly outnumbered, the French suffered losses in the thousands, compared to perhaps a few hundred from the English side.

After the battle, Henry is handed a document reporting his losses. He mourns his fallen by naming the few nobles who died – only four, according to Shakespeare – commenting on each and specifying their rank. But, Shapiro notes, he concludes by rounding out the others as “none else of name.”

So much for his pre-battle promise of their being as brothers to him, raised from vulgar peasantry to a gentled condition. After they have served their purpose – and grandly – their principle remaining characteristic in this context (of their giving their lives for him in battle) seems to lie merely in their making up the remainder of the number of his losses.

How different is this, really, from the fuss, such as it was, made over the legions sacrificed to the folly and malfeasance of executives who involved their organizations in the various business leadership and accounting scandals of the late 1990s and early 2000s, and the financial industry scandals of today. And how different is it from the rather more elaborate fuss made over these same executives as the degree of their culpability and the appropriateness of holding them accountable was and is debated with a sudden, and elaborately wrought, concern for justice?

It’s no good to pretend we understand leadership if our expressions of it so relentlessly result both in these disasters and these disgraceful responses to them. Modern managers need to shed this hopelessly exploitative, instinctively feudal approach to leadership. Until we learn to draw a more honest connection between our behavior as we prepare for, and as we emerge from, our challenges – whether they conclude in awful victories or more terrible defeats – we will make little real progress in learning how to express true leadership.

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Today’s tip: And speaking of not learning our lessons from a decade ago to today, please see this WSJ article by Dennis Berman about how there may be none to be learned – or no willingness to learn them.

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Technorati Tags: leader, follower, James Shapiro, King Henry V, Shakespeare, Agincourt, English, John Keegan, French, executive, organization, business, leadership, accounting, scandal, manager, WSJ, Dennis Berman

A discussion of the importance of values in the context of business and management can be conducted across a wide range of domains occupied by the individuals, formal and informal communities, organizations, societies, and cultures that are affected by them. Each has its own values, which influence and are influenced by all the others. As a result, an organization, to be effective, must comprehend this environment, achieve an understanding of its own place in it, and integrate that awareness consciously into its corporate goals.

But there is another fundamentally related issue, here: trust. At bottom, that is what makes the modern world of organizations work. No amount of legislation or regulation, no contractual obligations – and certainly no ostentatious professions of corporate values can take its place. No matter how many such formal structures there may be, if we don’t trust each other simply to do what we say we will, we cannot conduct business as we do in the modern world.

So, how do we know we can trust each other? Well, of course, the presence of shared values is a strong indicator of our ability to do that. But it doesn’t always take the form many of us expect.

Consider this description of a conversation Michael Cobb – a businessman, and political and cultural blogger – once had with a colleague from Hong Kong who was visiting Los Angeles:

I asked him what was the great difference between the way business was done in China and what he told me, I will never forget. In his clipped English he explained that in the US, we have a class of people who do business and an extraordinary system of openness and trust – that you don’t have to know your banker to know he won’t steal your deposits. In China conversely, you don’t do business with strangers.

One might think that the suggestion implicit in this story, which is encountered often, is that Western values make modern business possible to a degree that is not experienced elsewhere. Moreover, it is often greeted with amazement and a sense of liberation by those from other cultures who see it at work for the first time.

And in fact, that is how it is often interpreted, and by both Westerners and others. But actually the conversation reveals a deeper truth: both environments find ways to get business done in their own ways. And they way they do it has a lesson for all of us.

One generates trust arising from the peculiarly intense group dynamics of close networks, typically but not exclusively based on the family, which are fundamental features of collectivist cultures. The other produces an atmosphere of trust from the system of shared values often consciously formed in individualistic cultures which enable their members to interact safely and productively while maintaining their individualism.

The key issue here for us as managers and for our organizations is to recognize the uniquely secular role played by values for our purposes: it produces trust. It expresses our trustworthiness in ways that are recognizable to the individuals, networks, and organizations in the seas in which we swim, so that we can do business with each other to our mutual benefit.

The ultimate ambition of any organization is to accomplish its goals. But in order to do that, it must establish its trustworthiness among those with whom it must interact in order to reach those goals. And in order to do that, it must consciously, meaningfully, honestly – and genuinely – integrate trust-generating values in appropriate ways into its goal-generating activities.

Who would have thought that trust and values had such strategic import?

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Today’s tip: Speaking of the strategic importance of frankly addressing corporate values in cross-cultural circumstances, generating trust, and accomplishing organizational goals, please see this piece from Business Week about the increasingly desperate mess created by one European firm that may have paid insufficient attention to this.

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Technorati Tags: values, business, management, organization, culture, environment, awareness, corporate, goal, trust, legislation, regulation, contract, obligation, Michael Cobb, businessman, Hong Kong, Los Angeles, China, English, US, Western, group dynamics, network, family, collectivist, individualistic, individualism, manager, trustworthiness, Business Week, Europe

This year is shaping up to be a pointer to not only the direction the corporate governance debate takes, but the venue in which it is held. Thankfully, that direction seems to be toward more responsible assessments of the issues rather than denial of their existence, and that venue seems to be in the boardroom rather than in the bureaucracy. Let’s take a brief look at this.

Globalization. The presumption that problems with broken boards and corrupt chiefs are peculiar to the United States leads to the danger that the source of those problems will be misattributed – to American culture, for example, rather than to ill-conceived and managed corporate governance systems. But the truth is the difficulties afflict companies around the globe. See here for a WSJ piece on the latest high-profile outbreak of corporate scandals; this time in Germany.

Living large. One of the most volatile issues in this general area revolves around the complex issue of CEO and senior executive compensation. In my view, this, rather than being a problem in and of itself, is a symptom of a deeper problem – but it is highly visible, emotionally charged, and so will continue to attract attention in its own right. There is thus the danger that measures designed to address it will be abandoned once they succeed in deflecting attention.

But there is also the very real possibility that they will lead to more fundamental advances in the practice of corporate governance. Please see this item from Portfolio.com discussing how one company’s board is taking the initiative to trim some of the more egregiously excessive items on its executive compensation program. Next, view Joan Lublin‘s current WSJ column about an American company’s experiment with “say on pay” – a procedure whereby shareholders are asked to offer a non-binding opinion on compensation programs offered to executives, more common overseas and still widely resisted in the United States.

Director demography. Discussions of director qualifications and performance are riddled with misplaced assumptions. Most, for example, take the perspective that dysfunctional boards are an inconvenience to the CEO which are in his or her interest to repair. This approach, actually, is a reflection of the problem itself. For a welcome relief from it, please see this entertaining and enlightening Business Week essay by Beverly Behan about how boards themselves can deal with problem directors.

One of the greatest examples of how opportunity can be found in challenge resides in the issue of women in the workplace. This is particularly important for managers. And it appears that it will be difficult to address properly, much less resolve, until we see more women sitting on boards of directors. The catch-22 offered here is that directors require the sort of experience that the career paths followed by women at work tend to deny them. But this, as so many issues in this vital topic, turns out not to be true. Please see an excellent article about this at Management-Issues.

So this year indeed does appear to be one that will see a wide range of initiatives, studies, and commentary probing around this issue, attempting to locate its range and influence, identify its character and dimensions, and determine the proper bases for appreciating and managing it. This is a good development, and one we hope you will join us in following.

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Today’s tips: Speaking of peculiarities about pay, we spend a lot of time bemoaning the irony of a society that offers extraordinarily high pay to entertainers performing essentially frivolous services, and relatively low pay to teachers providing obviously vital ones. Please see this NYT article about a new charter school opening next year in New York that plans to pay its teachers $125,000 a year plus bonuses.

A post in an interesting new blog, Escape from Excellence, by Bill Wilkie caught my attention with this insightful assertion: “Skills enable action, they don’t take action, and they sure don’t make choices or create possibilities.” Please stop over to see why a recent Harvard Business Review article provoked this observation.

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Technorati Tags: corporate governance, boardroom, bureaucracy, United States, American, culture, corporate, governance, WSJ, Germany, CEO, executive, compensation, Joan Lublin, WSJ, say on pay, shareholder, director, qualification, performance, Business Week, Beverly Behan, women, workplace, manager, catch-22, society, teacher, NYT, New York, Bill Wilkie, Harvard

The legal construct of the corporation presents interesting questions of collective and individual accountability. The subject has attracted new momentum with the egregious managerial excesses that led to passage of the Sarbanes-Oxley (SOX) Act. Many commentators have argued that we don’t need additional laws like this, targeting people already burdened with exceptional responsibilities. But as new scandals emerge, that assertion is losing its force.

And yet, the shifting arguments continue: We have enough laws, we only need to enforce them – we don’t need to single out this class of manager taking so many risks so important to our economic success.

When I hear this sort of argumentation, I am reminded of something that happened years ago when I, after service as an enlisted Marine, had been selected to serve as an officer.

A young Marine in my unit had performed so brilliantly during a field exercise that I was putting him in for an award. Unfortunately, the first night of liberty after our return to barracks, he celebrated so much that he missed formation the next morning.

My command expected me to charge him for unauthorized absence, which he deserved. But I submitted along with the charges his award recommendation, which he also deserved. This caused some consternation.

I was informed that since he had committed a violation, his award had to be tossed, and he needed to be punished for his infraction. You may recognize this approach as one commonly taken toward those slugging away in the trenches (and even widely accepted as normal by them).

I responded that, since he had shown notable initiative and produced such terrific work under trying conditions in the field, perhaps we should look the other way regarding the violation, and give him his honorary recognition. You may recognize this as an approach commonly taken toward senior managers (and certainly widely expected as their right by them).

The truth is, I wanted to give him what he had really earned, which was both the award and the punishment. But the best I could achieve in this instance was to have both withheld, and I was glad enough for that.

Generally, the risks taken by senior managers are to their reputation or the scale of their financial remuneration. Those taken by line workers are that their initiative will pass unnoticed, be un-rewarded, or even be punished.

The venturing of which risks do you suppose work to power our economic performance, and which to eviscerate it?

Corporations need to right their own ships, or they can only expect to be boarded by government legislators.

And don’t pin your hopes on the recent explosion of MBA program ethics classes, either – the only institution that can prevent further degradation of the fiduciary integrity of business is the board of directors. Inside managers need to be removed, and directors need to take command.

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Technorati Tags: corporation, Sarbanes-Oxley, SOX, Marine, MBA, board of directors, directors

Crimes: The makeup and behavior of corporate boards remains controversial. More and more dust is being kicked up by the misbehavior of directors – especially executive directors – and the general dysfunction surrounding the operation of so many of these really key institutions.

While it can be difficult to penetrate through those dust clouds to the truths hidden within, we can be sure of one thing that they confirm over and over again: the interests of managers and owners do not coincide. Consider the case of a small local bank reviewed in this WSJ article.

It seems that the compensation committee was composed of all 13 board members, and three of them were executive directors. They had the full committee vote the three of them raises on the order of 100%, prompting the resignation of three other directors. That resulted in SEC filings, which caught the attention of the listing exchange, and of the press, exposing the issue to the public. Prior to this, even the shareholders hadn’t been advised of the sudden and dramatic pay hikes.

When you ignore matters of basic integrity – and I don’t mean here morality, but structural and fiduciary viability – you are going to have people probing the limits of what this untenable situation will bear – and this time I do refer to all of structural, fiduciary, and moral integrity.

The solution is not prosecution of willful violators of positions of trust – that is a recent and welcome phenomenon, but, at the end of the day, it’s only a stopgap. Listen to this quote from the referenced article, by one of the bank’s independent directors:

I have to question whether we are a board of directors — or a board of directed.”

Inside directors tend clearly and overtly to create the latter. And boards of directeds, if you will, will continue to make the news in this way as long as they exist. The fundamental solution is for firms (not legislators, please) to abandon the practice of including insiders on their boards.

Random Fact #4: I have never been in jail.

Once, a buddy and I were batting the breeze with our immediate supervisor, telling stories about growing up in our various parts of the country. Our boss was regaling us with one of his adventures, which concluded with his being tossed in the can by the local police. He laughed with the memory, and nodded to us, “It was my first time in jail,” as though it were a rite of passage he knew we would have experienced, ourselves.

We looked at him and each other with embarrassed incomprehension (how many of you are reacting like this?). He noticed, and looked at us, remarking with true amazement, “You mean, you’ve never even once been in jail?” (How many of you are reacting like that?)

Well, no, we each answered, shamefaced, we haven’t.

This manager was one of the most creative, open-minded, energetic, and forceful operators I have had the good fortune to work with. He knew how to provoke the creation of innovative solutions among a team, integrate them into an ingenious and effective project, and – most importantly – execute it.

His decisions and actions were impelled by organizational purpose and value. It is those forces that formed the lines within which he operated; not habit or irrelevant tradition. And not hall monitors.

As for me, well . . . I have been given to understand that the topic has been discussed once or twice, but, no, I’ve never been in jail.

How about you?

Today’s tag goes to Robin Yap at Yap 3.0.

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Technorati Tags: corporate boards, directors, executive directors, managers, owners, WSJ, compensation committee, executive, SEC, shareholders, independent directors, Inside directors, Robin Yap

Reinventing the MBA

Business education has come under fire from many directions, including in these pages, for a tendency toward academic abstraction, the pursuit of celebrity-scholar/consultant status at the expense of real work in the field, and a tendency to pile on the bandwagon, creating a proliferation of cookie-cutter MBA programs tossing out jargon-filled rhetorical chaff in order to distract students and businesses alike from the lack of substance inside. But this may be changing.

According to this item in The Economist, only 20% of international executives think that an MBA really prepares a graduate to be a manager. And MBA programs are beginning to get the message, adding courses on leadership and ethics, and even establishing closer links with businesses, as advisors and speakers. One school completely revised its entire curriculum, developing an integrated program via a series of intense planning sessions involving the entire department’s professors. Gushed one person involved in this process: “. . . most faculty in other places don’t know what other members are teaching in their courses.” Well, then, there’s still work to be done. But it’s a start. Tomorrow, we’ll take a look at one program that is a great example.

Back to legislating ethics

As we’ve noted, Peter Drucker long ago observed that if corporate boards failed to perform their duties, they would be performed for them. Government loves to fill this role, and recent events have provided plenty of fodder for America’s to do just that. The latest is, as reported in this NYT piece, an investigation by a Congressional committee into the relationship between executive compensation work and other projects some consulting firms do for the same companies. The concern is that a consultancy will advise a board to pay its CEO handsomely, then get hired by that CEO to do additional profitable work for the firm.

As a result, several of the country’s largest consulting firms have been asked to provide information to this committee regarding instances where they have provided both executive compensation and other project work to the same company. What will come next? Perhaps questioning of boards and CEOs that are highlighted by the discovery process currently underway? The issue is politically charged, and potentially poisonous. There’s no escaping the fact that if we don’t police our own ranks, the police will. Boards need to figure this out.

The “manager/owner distinction”

In response to my discussion in yesterday’s post about the need to maintain a separation of roles between managers and owners, aligning rather than combining their interests, Steve Roesler went right to the heart of a key difficulty with one facet of that suggestion: what are its implications regarding the now almost automatic award of stock ownership in its various forms? This is obviously a cornerstone of contemporary compensation schemes – how would it be affected if a clear separation of the manager and owner roles were maintained in the strict manner I propose?

That’s a great question, which bears genuine and close examination. After all, while stock ownership (particularly in the form of options) granted to managers has often acted to inappropriately distort their behavior, when done intelligently and thoughtfully, it can also serve to align their interests with owners. It is important to look into the question, because maintaining the distinction, I continue to argue, is important to a well-functioning organization. After all, as this WSJ item points out, studies show that business managers can often be ineffective as directors (while the item was about non-profit boards, and specified those, the elaboration of the finding supports my general contention). They can hardly be very useful when trying to be both simultaneously for the same firm.

When we appear to have reached a consensus on what is right or wrong in management, or on acceptable ways of doing things, to the point that we do them automatically and without further reference to their justifying rationale – that is precisely the time to reexamine and re-question them. Even when they are our own most cherished ideas.

That’s one reason having a forum like this is so useful – because so many of you take the time and trouble to register your thoughts, either directly to me or by posting a comment to a post. Thanks for your participation, and keep it coming!

A UK-based on-line news and discussion format, Management-Issues, has posted two items in the past couple of days that are of interest here. Both are related to the behavior of management and its relationship to, or effect on, company interests and the bottom line.

The first reports a study by two university professors comparing the home-purchases of CEOs with their companies’ stock prices. At first glance, this might appear to be yet another warning that we have too many PhDs out there clambering to find a way to break into the limelight. But this particular result may actually be more insightful than amusing.

The findings are that when a CEO’s home is larger than a threshold size, or when a new one is purchased which is substantially larger than the CEO’s current home, the company’s share price deteriorates over the following year. This, compared with an average increase in share value of 6% for companies whose CEOs content themselves with more modest accommodations.

The item suggests that CEOs who splurge on their homes may either feel unduly safe in their positions, or they sense that something may be going wrong at work, so they sell some shares while the selling is good, and use part of the proceeds to finance their dream home.

Another possibility, however, may be that this is yet another symptom of the imperial CEO syndrome, and that the self-aggrandizement of the CEO combined with the decline in share value are just the to-be-expected consequences of self-referential arrogant detachment.

The other item reports the results of a study of corporate fraud in Europe, the Middle East, and Africa. It revealed that nearly 9 out of 10 of the perpetrators are managers, and that fully two-thirds are members of senior management.

This is yet more evidence, should we need any, that managers’ interests and those of their companies’ owners do not naturally coincide. We need to reverse the tendency to associate a company’s identity with its managers. A company should be identified with its board of directors – whether an informal coalition of founders, a more formal grouping of direct investors, or a board of directors of a public company.

Such a board should be wholly independent (we’ll discuss what that means in the near future), focused actively on the strategic identity and direction of the company, and meaningfully engaged in ensuring that those are effectively executed by hired management. The company’s identity should derive, after all, from its strategic purposes – not from the self-aggrandizement of its managers which; it must be noted, has its source in inattentive boards.

Indeed, such a board would serve to release and discipline the formidable and essential power of professional management to accomplish its strategic and operational potential. As Peter Drucker cautioned, managers need strong boards.

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Technorati Tags: corporate fraud, Peter Drucker, Management-Issues, Boards, CEOs, Corporate Crime, Corporate Governance, Ethics

According to the theory that where there’s smoke there’s fire, the legal and political fuss raised in recent months over excessive, inappropriate, and allegedly illegal executive compensation schemes must have some basis in fact. It can’t all simply arise from envy at such wealth – and that wealth can’t always be explained away as acceptable due to the extraordinary risks these executives take, or the exceptional value that, according to one measure or another (also backdated/refashioned according to events?), they create.

At the very least, there’s plenty of smoke. And there’s plenty of running to and fro about it.

Consider excessive pay: As a result of Home Depot’s recent issues with the gargantuan pay package of its previous CEO, the current one has made careful efforts to ensure that his is more closely tied to performance and aligned with shareholder interests. The peculiar thing about this is that it is he – and not the board – that has been proactive on that issue.

Here’s a curious twist to the options backdating scandal: In some firms, options were inappropriately backdated, but the executives to whom they belonged were not aware that this had been done. As a result, the companies are making special payments to these executives to compensate them for the money they lost as a result of their not benefiting from illegal activity undertaken on their behalf without their knowledge which was later discovered, stopped, and restored. Compensation for being so unfortunate as to not benefit from wrongdoing? You figure it out.

It’s no wonder that such obtuseness is attracting so much attention. Efforts to restore some degree of seemliness to the issue range from persuasion to compulsion. As mentioned previously in these pages, even religious figures are getting into the act, attempting to persuade executives to reduce their own pay. At the other extreme, the US Congress is launching another effort to cap executive pay, this time by slipping into a bill raising the minimum wage a provision limiting the amount of deferred compensation that can be paid to an executive. This may be political populism, but that is like a grass fire: it only burns when fanned.

The management profession seems, sometimes, to have slipped its moorings. The self-absorption and greed that we see reported so widely in the press doesn’t necessarily represent the true overall state of things, but it clearly reveals a crevice, perhaps a widening one, in the fiduciary integrity of the corporate governance environment. If we don’t solve it ourselves, we will have solutions imposed on us. It is well past time to stop whining about outside interference, and to get to the business of straightening our own house.