Question

“In summary, corporate governance often does not work in the United States as it should. Agency problems, human nature, large and unwieldy boards of directors, and CEO power and control contribute to this breakdown.” (pg 473, Anson) I think this is a great analogy on summing up the different aspects of problems in corporations. It seems to me that a great deal of the focus of the entire company falls solely on the CEO. When Anson speaks on how CEO’s basically control what information they want the board of directors to know or not to know, the situation becomes concerning. He even goes further into it, explaining that even though CEO’s are revealing all pertinent information the board of directors lack the education to understand. He also mentioned “cronyism” when speaking on the appointing of the board of directors. (pg 472, Anson) Basically saying that CEO’s play a leading role in the selection of board members and quite often than not the CEO’s are choosing people they know, regardless of their qualifications. The power that CEO’s have over an entire company strikes me as alarming. It seems to me that there needs to be more separation of power and more checks and balances on the day to day operations of corporations. Going back to the first line in my statement, “corporate governance often does not work in the United States as it should,” is exactly what I am explaining. Corporations in the United State could use an overhauling.

Thinking of all that a CEO does brings me back to unit 7, fair compensation, “Do CEO’s get paid too much?” I am one to agree that CEO’s do get paid “too much”. After becoming more aware of all that CEO’s do, do you think CEO’s pay is justified? Do you think there should be more separation of power? If so, what steps would you instill in your company to ensure this great deal of responsibility wasn’t solely on the CEO?

Would like a detailed response

Answer 1