Wednesday, November 24, 2004

Boardroom culture and EC

Arthur Levitt Jr. (former chairman of the U.S. SEC) states in the Wall Street Journal of November 23st, 2004 that "The single greatest impediment to the restoration of confidence in corporate America is continuing instances of extravagant non-performance-based compensation. These huge paydays bolster a system in which executives have incentives to manage the numbers for short-term gain and personal payout, and not manage their business for long-term growth and shareholder value". (...) "The boardroom culture is fraternal, rather than skeptical. Therein lies the crux of the problem".

Levitt's statement reminds me of something President Bush bush said 2 years ago: "At this moment, America's highest economic need is higher ethical standards - standards enforced by strict laws and upheld by responsible business leaders" (Corporate Responsibility speech, July 9th, 2002)".