Evaluating the 'Doofus Factor' In Corporate Governance 204
PolygamousRanchKid writes with this quote from an article in the Economist:
"The directors of Yahoo! were 'so spooked by being cast as the worst board in the country' that they fired Carol Bartz as chief executive 'to show that they're not the doofuses that they are.' That was Ms Bartz's typically blunt verdict, offered to Fortune after she was dismissed with a phone call by the internet firm's chairman, Roy Bostock, on September 6th. She would say that. Yet Ms Bartz's criticisms of the board have been sympathetically received. Firing a chief executive by phone smacks of hasty, panicky decision-making. And Yahoo!'s board already had a poor reputation, having turned down an offer from Microsoft that valued the firm at several times what it is worth today. It is not just Yahoo!'s board that is feeling the heat. The directors of HP, another stumbling Silicon Valley giant, have been accused of serial ineptitude spanning the appointment and dismissal of Carly Fiorina as chief executive, the firing of her successor, Mark Hurd, and the selection of his replacement, Léo Apotheker. ... There is growing demand for boards to undergo a formal evaluation process, to assess both the performance of each individual board member and how they work together as a group. The European Union is considering new regulations that would require an independent evaluation of the board every three years."
Money (Score:5, Insightful)
Re: (Score:3)
To be fair, the government is not exactly happy that a company that employs so many directly and many more indirectly is faltering, but what else can they do to prevent this huge job market loss?
Re:Money (Score:5, Insightful)
Supporting the small business and individual entrepreneurship that actually employs over half of the workforce would be a good start. Small businesses don't just pull up stakes and go to China and tend not to do as much offshoring (it simply doesn't make as much sense, even in the short term for small business). They don't (and can't) throw a tantrum and threaten the regional economy unless they get special treatment. They're not too big to fail and they're not too big to punish when they commit crimes.
Re: (Score:3, Interesting)
Re: (Score:2)
Re: (Score:2)
There is some, that's why I qualified it with "as much".
Of course, when it goes wrong, the pain will be much greater than for a multinational, if for no other reason, they won't seem as impossible to successfully sue.
Re:Money (Score:5, Insightful)
In Ireland, there were only around 40 or so company directors amongst all the major bank, company and state boards. Most of these were also businessmen, CEOs, or managers. As you can imagine, nest padding was a primary activity. When the state property agency NAMA was created, one of the first acts of the board was to increase the chairman's salary by 70% [www.rte.ie]. I imagine similar outrages occur in the US.
The proper here isn't "doofus factors" or anything to do with individual boards. The problem is that the entire business and governance culture of the western world is no longer functioning properly. It has become mired in corruption, greed, fraud, and mismanagement. Yet still we tolerate crooks and doofuses because seemingly everyone agrees that this is the best way to run things. Our prevalent financial worldviews are unable to explain or understand why things aren't working anymore.
Personally, I feel that a "financial reformation" is needed in our society. Something literally of the magnitude of the Protestant reformation in the 1500s. We need to turn away from the corrupt established church of business and economics and find new business philosophies. We need to find a system which prevents doofuses, grubbers, and psychopaths from running our companies. We need a system in which shareholders are investors instead of gamblers.
We need a new way of doing business, and even of thinking about and understanding business. Otherwise we'll end up with companies like Yahoo, Microsoft, NASA, and Bank of America being run into the ground by directors, managers,and shareholders who at best have no idea what they're doing, and who at worst will actively destroy the company for personal gain.
Re:Money (Score:5, Insightful)
... new way of doing business (Score:2, Insightful)
In this current down economic climate (referring to the time period 2008 to 2011) neither boards of directors, nor management nor the government looks good.
Sort of incidentally (following on a college education that had about 4 semesters of American history and American culture classes) I have been puzzling about the American corporation and reading the occasional book on the subject. The first thing I feel these books show is that American corporations are creatures caught within the economic and cultural
Books recommended in the parent comment: (Score:3)
The Decline and Fall of the American Automobile Industry (1983) [amazon.com]
The Decline and Fall of the American Automobile Industry (1983) [google.com]
My Years with General Motors by Alfred P. Sloan (1964) [amazon.com]
My Years with General Motors by Alfred P. Sloan (1964) [google.com]
The Concept of the Corporation by Peter Drucker (1946) [amazon.com]
The Concept of the Corporation by Peter Drucker (1946) [wikipedia.org]
The Great Inflation and Its Aftermath: The Past and Future of American Affluence (2008) [amazon.com]
The Great Inflation [google.com]
Re: (Score:3, Insightful)
Personally, I feel that a "financial reformation" is needed in our society.
You can't change the entire world's way of doing business in one go. Note that the Protestant movement resulted in several wars, which I'm sure isn't something you're prescribing here. :)
No, passing a couple of laws would probably suffice. For example:
1. The primary responsibilities of the board should be to customers, employees and ethics, and *then* to shareholders.
2. The system of share trading should be slowly wound back, so that the value of a company is not defined by the value of shares on a share ma
Re: (Score:2)
You can't change the entire world's way of doing business in one go. Note that the Protestant movement resulted in several wars, which I'm sure isn't something you're prescribing here. :)
Why are you so sure? Entrenched power never goes away without a fight. The world is better off for having broken Catholicism's cultural hegemony. The world will be better off once we break the Corporate hegemony as well.
It could well be that a couple laws such as those you describe would suffice. But our system is so w
Re: (Score:2)
, I feel that a "financial reformation" is needed in our society. Something literally of the magnitude of the Protestant reformation in the 1500s.
I believe what you're referring to there is the glorious socialist revolution, comrade.
Re: (Score:3)
still... (Score:2)
Re: (Score:2, Funny)
And your answer was discredited 70 years ago.
Re: (Score:2)
That's corporatism. In socialism they're owned by the people
Re: (Score:3, Insightful)
Since they have no incentive to make a profit, they usually don't have any incentive to run thing efficiently either.
Incentives no longer work, anyway. The only reason, any progress happens at all, is that smart people would die of boredom otherwise. This is the only thing that motivates me and everyone I know.
Which is basically what you get with municipal run companies
This is a situation where Socialism gets leftovers from Capitalism.
Re: (Score:2)
If you haven't, you should read the Red/Green/Blue Mars [wikipedia.org] series of books bi Kim Stanley Robinson. I don't know if the economy described in the later books would work, but it is interesting to think about.
Re: (Score:2)
Re: (Score:2, Insightful)
As such it hardly comes as a surprise when you tell a CEO that they basically have free reign
Re: (Score:2)
A significant amount of research has been conducted ...
Could you provide a reference to this "significant amount of research"?
Re: (Score:2)
all at the investors' expense
At O_U_R expense. Or do you think that the 'investors' made their money by working extra shifts? More like they came to it along the lines of bailouts, tax-exemption deals, subsidies etc. .
CC.
Do a test to find the psychopaths/sociopaths... (Score:3, Interesting)
There was a recent Horizon programme (BBC) which said that psychopaths are 4 times more likely to be in the boards of businesses etc., than in other jobs.
Not surprising. I knew these people are good at manipulating, on my website I named a bunch since 2003 related to airtravel industry and Schiphol in particular, and that is actually what they are often picked for. To manipulate in the media etc. I'm not sure if this was just a recap of old research or new, if new then these researchers are not too bright (then again, what can you expect in the social sciences).
One of these researchers said it was hard to find the psyochopaths. Oh really? I can pick them out almost instantly. A good tool is reversible arguments. E.g. one such a-hole working for a dutch airport that wanted to expand said of those who were opposed and stopped it multiple times in court that 'a few times is ok, but this is ridiculous'. The same can be said of those a-holes of that airport. There plannes had been blocked by the courts, and yet these a-holes kept going against it and making new plans and/or getting the judgement overturned. So, he did exactly what he accused the opposing party of because it was unacceptable.
Try it! Look at someone you think is the biggest a-hole you ever saw (which are typically psychopaths who care nothing about anyone except themselves), and try looking for a reversible argument. I bet you will find one ore probably multiple.
Once we get rid of these people in boards of companies, perhaps life will improve.
Oh yes, the programme also said that these psychopaths can manipulate, make themselves look good to some people, but their performance is crap... Doesn't surprise me again, reminds me of former Schiphol director Cerfontaine, who has never amounted to anything, never did anything useful for any company even if the guys who hire him think so.
Even worse actually is that such morons (don't call them clever, they are not, as I said, with a few things to look out for you can easily push through their bulllshit-artistry), are even gettign honorary jobs at universities, perverting students...
Re:Do a test to find the psychopaths/sociopaths... (Score:5, Interesting)
Simply put, these groups suffer from group think. Happens to every group, and we likley suffer from it as well (e.g. in any group of like thinking people say organized religions, sport clubs, political followers). They can walk down a one way dead and each will pat each other on the back all the way.
PS: Do not forget, it may take a marginal psychopath to run those companies. Your statistics did not say if these psychopaths are the successful CEOs or not.
Re: (Score:2)
I cannot say for Great Britain, but the estimated occurrence rate of people with Antisocial Personality Disorder is ~4%, about 1 in 25 people. Four times that would be about 1 in 6. Beyond that, it all ignores the broader issue of Cluster B personality disorders (IE: Antisocial, Narcissistic, Histrionic, Borderline) in general, which make up just under 10% of the US population. I am curious as to how many of those make it into the board rooms, executive suites, and public offices. If that factor is eve
Re: (Score:2)
Re: (Score:2)
The risk-reward equation is much simpler when there isn't an emotional factor.
There often is an emotional factor that goes something like "Fuck this guy", or "lets screw over these people, because maybe I will get a thrill". The emotional systems of psychopaths are well geared towards power, money and sometimes sex. They can be well practiced bullies, that know exactly how to destroy someone.
Would you trust the risk-reward equation of someone who genuinely didn't give a shit about human suffering?
Re: (Score:2)
It would, however, create a substantial minority. Given how those with cluster B disorders act, it would not in any way be surprising to find that the 60% would kowtow to the 40%.
Re:develop similar networks. (Score:2)
I'm just an amateur and I attest to this.
If you can spin mirrors of chaos at 170 words per second you collect groupies. Simple as that. Then people see that the groupies are "on to something" so the second level crowds join.
Re:Do a test to find the psychopaths/sociopaths... (Score:5, Interesting)
Junk
Interesting that you just think you know this, even though the statistical rate of psychopaths is 1-4% for men.
/needing/ to be a marginal psychopath to run a company -- this suggests that you really don't know what a psychopath is. A psychopath is a mimic [wikipedia.org] that cheats on the social programming on regular people. Thinking that psychopaths have a place in society is like think that pedophiles have a place in society. It is a dangerous pathology.
Every human being should do themselves a favour and watch Kathryn Shultz's TED lecture on being wrong [ted.com].
As for
Perhaps you need to be a marginal pedophile to be a priest?
Re: (Score:2)
Interesting that you just think you know this, even though the statistical rate of psychopaths is 1-4% for men.
..
Thinking that psychopaths have a place in society is like think that pedophiles have a place in society. It is a dangerous pathology.
If I'm reading you correctly, you're saying that 1-4% of men (and presumably some other percentage of women) have no place in society. If I've got that right then what exactly would you propose to do with all these people?
Re: (Score:2)
Wow.
How about we start rounding these people up and "removing them from society."
Who is the psychopath again?
if 4% of men are psychopaths, then you've probably met hundreds in your lifetime. and somehow you managed to survive!
maybe the "social programming" in "regular people" has some security vulnerabilities that should be patched.
Being wrong. (Score:2)
Re: (Score:2)
http://www.ribbonfarm.com/2009/10/07/the-gervais-principle-or-the-office-according-to-the-office/ [ribbonfarm.com]
Re: (Score:2)
This reads like something i might have written my sophmore year of college.
Re: (Score:2)
Really, it isn't that bad.
Re: (Score:3, Informative)
Your "reversible argument" test would work about as well as the "see if they have two eyes and a nose" test. For a test to be useful, you need to ensure:
a) If a person meets the criteria of the test, they are a psychopath.
b) If a person isn't a psychopath, they won't meet the criteria of the test.
Reversible arguments are really common in all humans, not just psychopaths. It's a common belief that when other people do something, it's bad, but when I do the same thing, it's OK. Generally this is justified
Re: (Score:2)
I can pick them (psychopaths) out almost instantly.
That's bravado talking (or "I call BS"). I don't think calling corp. boards members "psychopaths" as a blanket statement is helpful. Inept perhaps. And making statements like "I can spot 'em" is just plain rubbish. The true psychopaths, serial murderers, go for years undetected. Where were you when the last few were finally caught? Psychopaths are in fact not easy to spot; the only distinguishing factor that differentiates psychos from the rest of the population is the way they think. They blend in in all w
Re:Do a test to find the psychopaths/sociopaths... (Score:4, Insightful)
Re: (Score:2)
Psychopaths are in fact not easy to spot
I thought you just needed to ask them what they'd do if they were walking along the desert and saw a tortoise lying on its back...
Re: (Score:2)
And when they do get caught, all the neighbours say how nice (or at least, quiet) they were.
Well yes. Because if they were drooling swivel-eyed loons with all their windows painted purple they'd get hauled in after the first victim was discovered. I bet it was him, that weird one at number 27, you know, him with the coat...
Re:Do a test to find the psychopaths/sociopaths... (Score:4, Informative)
The reversible argument is just a common pastime that allows people to try to dump blame for something on others. It is not unique to sociopaths. What you are looking for is a systematic disregard for the rules and standards of society and violating the rights of others, especially including breaking those in such a way as they do not usually get punished for it. This can be either because of careful planning, manipulation of peers, making it a hassle for others to stop them, appealing to pity, political influence, etc...
To put it frankly, you are looking for a pervasive, but not necessarily omnipresent, pattern.
A few things to help you out though:
- They do not honor commitments unless it is specifically in their self interest to do so, such as to impress someone important.
- When they are confronted, they will almost never admit responsibility unless they themselves recognize it is advantageous to do so. They will usually either fly off into a rage to scare you away or others into stopping you or launch into a ridiculous appeal for pity, complete with all sorts of BS mind-games like the one you mentioned.
- They get board easy and are frequently impulsive. So, they like to find people to brag about their exploits to if they cannot find something or someone new to torment and destroy, bonus points if they can torment someone while bragging to them.
- They feel that being antisocial makes them smarter than everyone else, because having a conscience retards us and makes us easy to mess with.
- They like collecting tools to do their dirty work for them. But, will actively eliminate anyone deemed to be a competitive threat to them, often using the aforementioned.
- They can mimic complex emotional expressions, but the top half of their face frequently does not match the rest of the body.
- One tell tail I have noticed is the wicked "I have won!" gleeful smile accompanied by hollow eyes when they are actively terrorizing someone or something and getting away with it.
That ended up being a lot longer than I thought it would...
Re:Do a test to find the psychopaths/sociopaths... (Score:4, Informative)
Speaking of bullshit-artistry, you just constructed a nearly-incoherent post that consists of slapping a new name on hypocrisy and claiming that you can pick psychopaths (a group of people known for their ability to lie) out almost instantly, and you got a +4 insightful mod out of it. Way to go!
By the way, you should contact the psychiatric association of whatever country you live in, I'm sure they'll be interested in your amazing ability to diagnose mental ailments.
Re: (Score:2)
Re: (Score:2)
and try looking for a reversible argument.
I believe what you are talking about is called a mirror image projection. You see, we project on others all the time. Everyone does it. It is part of standard mundane human madness. So when someone disagrees with you, it is because they don't listen. The mind actually contrives to make you unaware that you are not the one listening.
Now you have two people saying that each doesn't listen to each other.
When someone is in denial -- ie: all of us -- we will project our ignorance onto those who try to confr
I know you are but what am I? (Score:2)
I'm rubber you're glue, bounce off me and stick to you, na na na na naaa na.
Re: (Score:2)
Technically a psychopa
Re: (Score:2)
There is a really good book relevant to your post:
[url=http://www.amazon.com/Sociopath-Next-Door-Martha-Stout/dp/076791581X]The Sociopath Next Door[/url]
Excellent read, that one.
Re: (Score:2)
wtf?
arggghh
instead of [
Re: (Score:2)
The "reversible argument" argument fits an observation I have frequently made during the past few years. There is what seems to be a growing category of people that frequently accuse their opposition of doing exactly what they are doing.
I absolutely agree. You see this sort of thing time and time again in arguments about climate change and evolution. The mainstream science will be described as a religion by uneducated people who display a lack of understanding of the science and who just "believe" that climate change or evolution is wrong.
Or you have the claims that climate scientists are just toeing the line because they are just in it to get funding. These claims originate from think tanks that are funded (at least in part) by the establ
Re: (Score:2, Insightful)
When you start studying the political left under a critical eye, you will see all sorts of bizarre ignorance, which is protected with
Re: (Score:2)
Thanks for replying. I agree that there is a lot of wishy-washy thinking out there, but I am still unsure from the topics that you raised what the actual argument is that the left is using that would actually apply to themselves?
Re: (Score:3)
A specific example of the "reversible argument" from the far left would be greenpeace (correctly) accusing the heartland institute of peddling anti-science propaganda about AGW, while GP themselves are busy peddling anti-science propaganda about chlorinated water. But I do agree, for me, examples of the "reversible argument" are much easier to spot on the far right.
Disclaimer - I've been a mod
Re: (Score:2)
It is very common in the shallow end of the US right wing gene pool.
It is very common on all ends of the political spectrum. The shallow end of the US right-wing is probably worse, but don't fool yourself that liberals are saints. They often have equal and opposite ideological blind-spots, and engage in the same type of mirror image projections. (What you called reversible arguments.)
Radical liberals are just plain paranoid nutcases, and should be put on an island with dominionists christians, tea partiers, climate change deniers, 9/11 conspiracy nuts, racists, radical s
Re: (Score:2)
So, you claim he probably is guilty of being guilty of being guilty of being of being guilty of .... etc.
On a scale of 1-10... (Score:2)
Comment removed (Score:5, Interesting)
Re: (Score:3)
You are talking about corporate, academia I am finding out to my chagrin, is no better and in many cases actually worse. Case in point: I am one of two developers (senior of the two) hired to work on a new web project at a respected university. The junior "developer" from day one argued (and almost convinced) management that we should use the standard install images given to students with all control panel/configuration functionality disabled and locked down.
Failing that, he then thinks because he took a "p
Re: (Score:3)
I learned quickly (Score:2)
Hell, I'm only 21 and I'm already getting tired of office work.
Immediate supervisors and co-workers have generally been fairly easy to deal with, but seemingly-illogical aspects of the organizational bureaucracy frustrate me to no end.
I admit I have some bad habits that don’t make things any easier (“easily distracted” and my FUBAR sleep/caffeine habits come to mind).
I also admit that more experience/acclimatization could be helpful, that I may find a better specific environment, and that
Academia, huh... (Score:2)
Reminds me of a few teachers I know (at levels below college) who were driven up the wall by lazy/misbehaving students [the causes of that problem are another discussion]
Maybe _teaching_ at the college level is better that working on nonacademic staff [one of the aforementioned teachers moved to a college tutoring job and says that he likes helping people that actually want to be helped.
Re: (Score:2)
Re:On a scale of 1-10... (Score:5, Interesting)
hairyfeet opined:
THAT, that right there, that to me marks the dufus problem in a nutshell. it is upward failure where doing dumbshit yields a quick gain followed by a HORRIBLE outcome, but the gain gets the dufus moved up or a "selling point" on his resume and he/she is out of their before the excrement hits the bladed cooling device.
What you have just described is the fundamental career philosophy behind the MBA. To state it another way, the default MBA business strategy is: "Ramp up short-term profitability by whatever means is necessary/convenient, regardless of long-term consequences for the company, because by the time those consequences arise, you will have been hired away to work at a different company, at a higher pay grade, and dealing with those consequences will have become somebody else's problem.
The problem for the Western economy is that, ever since the Reagan administration (or the Thatcher administration, or the Mitterand administration, or ... but you get the picture), MBAs have progressively grown in influence to a position of utterly dominating corporate governance in every country outside of China. It is they who are responsible for exporting the bulk of Western industrial production to developing countries, it is they who were responsible for creating and marketing poisonous mortgage-backed derivative securities (and thereby crashing the global economy - a process that is only now reaching its middle, rather than ending), and it is they who dominate corporate boardrooms.
It's not so much that they are psychopaths. It's that they have been trained to be psychopaths by the most prestigious business schools in the Western world. And this all in the name of delivering maximum value to shareholders.
The problem with the MBA philosophy is that the only shareholders that matter - because they are by far the largest shareholders - are institutional shareholders: insurance companies, pension funds, banks, and so on. And these shareholders' investment portfolios are run by - you guessed it - MBAs, who have absolutely no loyalty to anyone or anything except themselves. They'll kick a fundamentally-sound stock to the curb in a heartbeat, so long as their spreadsheets tell them that a company down the block is offering higher short-term profits, regardless of how unsound that new company's long-term outlook might be, because they don't invest for the long term.
Which, incidentally, is why Wall Street and its fraternal counterparts have been experiencing day-to-day mood swings like a bipolar teenager with PMS. In fact, that phenomenon is a result of the MBA-mediated migration to algorithmically-based automated trading systems, which, by intent completely ignore long-term value in favor of short-term gains produced by, essentially, day-trading on a massive scale.
And, short of outlawing MBAs and hanging all existing holders of the degree, I see absolutely zero chance that this utterly broken system that rewards only MBAs will - or, for that matter, can - change for the better any time in the forseeable future.
Re: (Score:3)
Re: (Score:2)
Hudsucker Proxy (Score:2)
I firmly believe that starting with Carly HP's stock has been purposed trashed so it could be shorted and then pop back up when the "problem" is removed. Once you get that big you can no longer raise your stock by leaps and bounds, it's time to play yo-yo with the stock price and hope you don't sink the ship.
But if you do there's still ways to profit from it...
Re: (Score:2)
Driving the stock price down is a one-time good deal. Redirecting funds from operating expenses to executive bonuse
Interesting problem (Score:4, Insightful)
Interesting considering that board members are elected BY stockholders, and are supposed to represent their interests. Let them vote for the craziest folks they dare, as long as they vote for them. It seems silly that you would subject board members to arbitrary tests when they've won the acclamation of their shareholders.
Of course this highlights a big problem with corporate governance, namely that boards are elected by stockholders, but a combination of stockholder disinterest and large institutional and mutual fund investment in firms has led to the composition of the board ballot being decided by the CEO and management.
There's no such thing as a free lunch. If you don't want "doofuses" on your board of directors, don't vote for them. Setting up some sort of independent review system is simply going to present stockholders with another stream of information to ignore. If you believe in democratic corporate governance you have to let people vote for who they want, and accept the responsibility for what happens to the business. The fact that Carol Bartz did a pretty lame job running AOL, and that the company has been on a death spiral ever since the Time Warner merger -- and for practical reasons will probably never figure out how to make their combined business a going concern -- has a lot more to do with the poor performance of the firm, notwithstanding the board.
Re:Interesting problem stockholders have no real s (Score:3, Insightful)
Actually the courts have restricted the nomination of directors on the corp proxy statement to those nominated by the incumbents. Unless you have a lot of money you can't win a proxy fight. The club protects itself with nominating committees picking only those good ole persons who fit their mold. The SEC tried to let 5% of shareholders nominated director candidates on the corp proxy, but the incumbents said it would be the end of the world and went to court and won that the SEC did not do the job right. S
Re: (Score:2)
Note that the only people on the proxy ballot are the ones provided by the board, who, amazingly enough, generally only provide you with one candidate to vote for in each position. Write-ins are generally not permitted, although you *can* vote *against* the board-provided candidate. Note also that you are not al
Re: (Score:2)
So all shareholders that attend the annual meeting must wear ski masks and use first names only?
Re: (Score:2)
The "stockholders" consist of fund managers and traders who are simply engaged in gambling. They don't care about who runs the company, because they will likely be out of the stock by the end of the week. Most of them probably have little to no idea what the company even does. In the case of HFT operations, shares are held for milliseconds, with no human even knowing which companies were invested in.
Amidst all this is the fabled "stockholder"; the retail investor who probably still views his purchase of the
Re:Interesting problem (Score:4, Interesting)
You should review Yahoo's DEF-14A [sec.gov]. Yes, the top three stockholders appeared to be funds. No, they're probably not trading it actively, because trying to buy or sell 90 million shares is guaranteed to move the price against you. Yes, they're interested in the company's chief officers, but probably only for quarterly profit, and not the long-term (decades and beyond) success of Yahoo!.
You can bet your ass that every HFT operation knows YHOO; there is always a person behind the algorithm. And yes, there's probably a large share volume being traded by HFT algorithms and market makers. However, the total number shares owned by these organizations at "voting time" is probably next to nothing. You don't get voting rights just for having the stock passed through your hands: you actually have to hold onto it (at least for one day), which is antithetical to any form of day-trading.
Someone who is entrusting their entire savings to the stock market is either (1) young, (2) stupid, or (3) isn't paying attention. For retirement investments, the stock market is advertised as high-risk/high-reward and is not suitable for lump-sum liquidation. I agree with you that too many Americans don't treat it this way, and this is a travesty. But please don't be bitter at the stock market for being the speculative arena that it always has been.
Re: (Score:2)
Interesting considering that board members are elected BY stockholders, and are supposed to represent their interests
That's exactly why they're doofuses. There is a totally ignorant belief that most voting stock is owned by the rank and file having purchased a share a month out of their paycheck for the past 50 years, and therefore most voting shares are now owned by near retirement grayhair rank and file who will defend the value of their retirement fund by voting "correctly" (as if that class would even know what "correct" is..)
The reality is that virtually all stock is either momentarily owned by programmed day tradin
boards don't really make any sense (Score:5, Insightful)
They don't run companies effectively because they aren't really in charge of the company. Most board members do completely different things as day jobs. Some are on five or six boards. You cannot effectively run six multinational companies and also have a day job at a seventh, though you can surely succeed at pulling in seven salaries.
For example, when there were some shady stores about Cisco coming out earlier this year, I looked up their board to see who I could contact. Oh, one of them is the President of Stanford University. How much time do you think the President of Stanford spends keeping tabs on Cisco's corporate affairs, making sure that the company is run properly? Another one is, uh, Carol Bartz, until recently the CEO of Yahoo being discussed here. How much time do you think Carol Bartz took out of her Yahoo day job to make sure Cisco was being responsibly governed? Yet another Cisco board member; Michele Burns, CEO of Mercer, the world's largest H.R. consulting firm. Do you think she spent lots of her free time, when not running Mercer, to make sure Cisco is doing things right?
No, in practice, the boards don't have any idea what's going on, the CEOs all sit on each others' boards anyway, and the boards therefore leave things to the CEO, ignorance-is-bliss style, until someone forces them to care, either because the stock price is tanking, there is bad media attention, or unwelcome attention from prosecutors.
Re: (Score:2, Interesting)
This is a very insightful comment - few people seem to understand how heavily corporate boards are "cross-pollinated" with one another's members. The same is basically true of the major shareholders for many companies as well. There's a prevailing notion that shareholders are basically a large and broad field of individual "Mom and Pop" investors when in many cases the shareholders constitute a small and deeply entrenched class of extremely wealthy individuals or trusts who own significant holdings across m
Re:boards don't really make any sense (Score:5, Informative)
The function of a board is oversight. You can't run a company by committee, and you can't run it with an unaccountable CEO either. More shareholder transparency would be good, but shareholders can't play this role because (a) they have even less time than boards do and (b) competitors could buy a single share of stock and gain access to all of a company's sensitive strategy.
So, boards are actually a pretty good idea. But that doesn't mean the implementation is always good. If you are CEO, you want a weak, uninvolved board.
Re: (Score:3)
So, boards are actually a pretty good idea. But that doesn't mean the implementation is always good. If you are CEO, you want a weak, uninvolved board.
Actually, you want the CEOs of the various companies whose boards you sit on to be the board that oversees you. You let them slide as they let you slide.
That's why even when the CEO is all but escorted from the building by security, they have job offers lined up before the door even closes behind them. There's people they've let slide who owe them one, and they're already known to be willing to play ball.
it's been done (Score:2)
direct engineers at my past employers for about the last 10 years have had to undergo evaluations every year. this has never weeded out the bad engineers. it only succeeds in lowering the moral of all of them.
Firing always works (Score:5, Insightful)
James Carville, who was Clinton's right hand man just wrote advice to Obama, on how to look more compentent [cnn.com]. His advise was to do lots of firings to appear in charge and for them to be scapegoats.
It works for past presidents like Reagan, Clinton, and Bush Jr. Surely, the board did this for the same reason to appear like they are doing their jobs etc. Many in upper management reading this can relate to newer guys coming and firing people in order to appear all scary and powerful to their new employer.
Most of the smart people who pay attention can see right through this.
Re: (Score:2)
"James Carville, who was Clinton's right hand man just wrote advice to Obama, on how to look more compentent. His advise was to do lots of firings to appear in charge and for them to be scapegoats."
I'd rather our president actually be competent. He should be firing those that deserve it. Political games don't get work done, just theater for the idiots. The US seems to have lots of idiots these days.
Re: (Score:2)
Political games don't get work done, just theater for the idiots.
Political games can, however, determine who is in power for the next four years, which in turn has ramifications that can easily impact hundreds of millions of people. A democratic president might not have gone into Iraq the second time, for example.
Re: (Score:2)
I personally feel he is in over my head but the opposition is competent but very extreme and can do serious damage because they hold ideology above all else. What a mess. I just may not vote next year.
The irony of this, is that conservatism is *not* supposed to be about belief and ideology, but about the status quo, and organic sensible change. The current political right represents truly dramatic progressive politics -- they really want to shake things up. That is what liberalism is supposed be about: we can use policy to change the country. Conservatism is meant to resist change. After-all, you don't know what you don't know, and liberals can be really arrogant about their wide-eyed ideas.
My how tim
Re: (Score:2)
The problem is I find the republican candidates scary and very far to right.
You could always grow up. A lot of damage has been done to the US because of fear and greed. I don't buy the attempt to equate fiscal responsibility with religion.
I personally feel he is in over my head but the opposition is competent but very extreme and can do serious damage because they hold ideology above all else. What a mess. I just may not vote next year.
Sounds good to me. Maybe you shouldn't vote. While I am leery of both the legislative and executive branches being dominated by the Republican party, such a thing would be able to reverse the worst excesses of the Obama administration (and maybe of the Bush administration as well). And we can always vote in Democrats (or whatever viable second par
Re: (Score:3)
Perry wants to repeal the 16th & 17th amendments (source his 2010 book). You think the economy is in a bad way now and congress is controlled by mega-corps? - What will it look like when the feds can't collect income taxes and senators are appointed rather than elected? Also, Perry's recent "pray for rain day" stunt makes a mockery of the 1st.
Bachman wants to disband the federal reserve and replace it with...I don't know...fairy du
Market maturing faster than leadership (Score:3)
At the end of the dot-com boom, people thought the market 'had matured' and I had my doubts. Well, they did get over the gold rush of buying everything they saw and acting on every idea anyone had, but the players that remained felt they had accomplished something and believed they knew it all. But in reality, the dot-com bust signalled the pre-adolescent period of the market -- approximately the same age kids begin to understand what death is.
Many of the players are still reacting to the changes of the market and few are leading. Yahoo lost its command of the market long before the dot-com and have been sustaining themselves on their old glory and people's reluctance to change their chat and email addresses. They don't listen to their users and often abuse and discourage them when they use their services in ways yahoo hadn't anticipated. Their teenage arrogance made them feel they knew it all and had it all under control and when they finally saw they didn't, well... the reactions and results speak for themselves don't they?
HP and Yahoo just look like a pack of fools and I think many will agree that they simply are. And while Google encourages fandom in all forms by its users and customers, HP and Yahoo have a record and reputation for discouraging, suppressing and even litigating against their users. (Only the MPAA and RIAA can actually sue their customers and expect to survive... not so much Yahoo and HP and their ilk... they don't have a true oligopoly in such a fluid market as 'the net')
I'm confused... (Score:5, Interesting)
Re: (Score:3)
Why is it that sacking peons as fast and impersonally as possible makes you a strong, visionary, leader who is willing to make tough decisions; but sacking your CEO good and hard makes you a panicky dumbass?
Because your CEO is well-connected enough to have friends in the media.
Re:I'm confused... (Score:5, Insightful)
People who have the ear of the press have seen one their own callously fired by voicemail. That is, they have seen one of their own treated exactly the same way they have treated millions of peons year after year and that frightens them and bursts their psychotic delusion that they are somehow intrinsically better than the people they treat like garbage.
Multi-faceted issue. (Score:3)
Remember when that flight attendant pulled the emergency line, told everyone to fuck off and quit in a most convincing style?
He was a bit of a hero in many peoples minds. The Yahoo! CEO! deserves at least as much of this as him; but the underlying problem remains the same.
Holding a BOD to any sort of responsibility is a great theory; but it runs against current practice. Often, the appointment is be a reward for sychophants, rent boys or sadsacks. Changing this could be a major upset of corporate organization.
Stumbled upon an interesting search topic (Score:4, Interesting)
2002: Fiorina says HP may get out of the PC business.
2004: The Uncertain Promise of Utility Computing
2005: HP CEO Carly Fiorina to step down.
. . . An Engineer's view of Carly Fiorina's Leadership (Story later retracted by TechnologyReview on the grounds that they can no longer vouch for it. Interesting.. )
. . . HP and Apple Separate; Apple gets custody. (OOPS!)
2006: Forbes now thinks Carly saved HP
. . . HP regains throne as top PC maker
2007: Ex-HP CEO Carly Fiorina hired by Fox News
2011: This article, which suggests, again, that Fiorina was perhaps making the right moves all along.
As much as the geek crowd hated to see what was happening to HP, it definitely that perhaps Cloud Computing and handhelds were the go too thing after all and that the execs that fired her just couldn't see The Big Picture. One for sure though, is as sad as it was to see the engineering innovation go, it's even sadder to see the company struggling to recover from the series of "oops" that sent it into it's current downward spiral.
A Challenge to all. (Score:2)
Has anybody ever worked for a company where the senior management/executives weren't useless douchebags?
Apple and SnOracle employees are pre-considered counterbalancing and need not chime in.
Large Hierarchies Insane; Story from Texas (Score:3)
Many years ago, I realized that the larger and more layered a hierarchy is, the more insane it is. As TFA and most posts have pointed out, the board does not do what a board should do. The President/CEO is generally (generalizing, here) outward-facing, mostly concerned with how the organization is perceived. Vice-Presidents are... well, vice-presidents - some are good but many are either competing to be the next President or are too scared to do anything that they are not already doing. Middle management ar
Complexity (Score:2)
"The European Union is considering new regulations that would require an independent evaluation of the board every three years"
Sounds like a bureaucratic solution to me. In the olden days they just waited until a mismanaged company went under. Nowadays you need additional people and laws to prevent inefficiencies. I'm wondering whether the bureaucratic solution will cost more than the gains from spanking the CEOs will bring in.
The problem is the stock market (Score:2)
I honestly believe that the root cause of all this is the casino we call the stock market. People no longer buy stocks for long term gains; instead, speculators and HFTers trade in the very short term.they're gambling, not investing.
This means that the shareholders have a short term interest. As the BoD's duty is to the shareholders, they are actually doing their job when igoring the long-term and focusing on the short. Thus, you see idiotic actions focused on share price rather than value creation.
The righ
Re: (Score:2)
I think a minimum holding time of 60 days or a 10% change in value, whichever comes first, for shares mutual funds or any other vehicle that represents equity shares, would do the job.
The real job of the board of directors (Score:2)
Competency Appraisals? (Score:2)
> There is growing demand for boards to undergo a formal evaluation process, to assess both the performance of each individual board member and how they work together as a group
Fuck, that would be a world first. And now for the politicians...
Various conflicting problems... (Score:2)
This really should not have to be a concern of the government. As other posters pointed out, board members are hired by shareholders, and can be voted out by shareholders.
Unfortunately, this lovely-sounding situation somehow doesn't actually work. Possibly because most of the shares that actually get voted are held by large organizations like banks, mutual funds, pension funds, etc. - whose votes may be driven by intercompany politics.
Even if the voting worked, the selection of board candidates that you can