One of the painful results of boards embracing the goal to “maximize shareholder value” is shown in the Edelman Trust Barometer: Only 53% of respondents trust business Only 18% of the general population trust business leaders to tell the truth The overarching goal for corporate boards should not be to maximize shareholder value. Instead, boards should set as their primary objective to: Build an excellent, ethical, and enduring organization. Excellent means achieving extraordinary results for customers, employees, and shareholders. Ethical means achieving those results the right way, with integrity, not cutting ethical corners. Enduring means achieving those results sustainably, being conscious of the firm’s impact on the planet, and acting responsibly to ensure precious resources are not wasted. Enduring also means acting sustainably inside the firm, not burning people out, nor …Continue Reading
J.R.R. Tolkien in military uniform, 1916. Image: public domain Leaders Venture into the Unknown “It’s a dangerous business, Frodo, going out your door. You step onto the road, and if you don’t keep your feet, there’s no knowing where you might be swept off to.” Bilbo Baggins Leaders Step Up “I will take the Ring,” Frodo said, “though I do not know the way.” The Burdens of Leadership Frodo: “I wish the Ring had never come to me. I wish none of this had happened.” Gandalf: “So do all who live to see such times, but that is not for them to decide. All we have to decide is what to do with the time that is given to us.” Leaders Undertake Great Challenges “This is the hour of the …Continue Reading
Compensation levels for CEO’s and C-suite execs took off like a rocket starting in the 1980’s. It was caused by the dual whammy of Milton Friedman’s “maximize shareholder value” maxim and the advent of the “leveraged buyout” focus from private equity firms. I should know because I participated in those phenomena as a CEO. The stock options I was granted during those years far exceeded the norms of option grants in prior decades as boards tried to “align” management’s financial interests with those of shareholders. There is nothing inherently wrong in private equity, stock options, in divesting unproductive assets, or delayering bloated companies. Those undertakings are a healthy part of marketplace adjustments, as long as they are done ethically and respectfully. But the C-suite financial gains that boards approved to, …Continue Reading
Tweet Chat August 4 ~ Monday 7 pm eastern, 5 pm mountain time The Essentials of Leadership #leadwithgiants Join Bob Vanourek and Dan Forbes, the guru of Lead with Giants, for an exciting, interactive Tweet Chat on August 4 at 7 pm eastern time (5 pm mountain) on: The Essentials of Leadership Tweet Chats are a fun way to engage in a conversation with many others on Twitter. It’s easy to do. You send out a tweet that includes: #leadwithgiants You will be networked with many others around the globe. Dan will ask Bob questions about the Essentials of Leadership; Bob will respond; and you can respond too with tweet comments, adding, agreeing, disagreeing, or retweeting related posts from other Tweeters. The session ends after 60 minutes. Just don’t forget …Continue Reading