Milton Friedman versus Klaus Schwab – it was a battle between two world views. In 1970, Friedman wrote his seminal essay on the role of the firm effectively arguing that the “business of business is business” and that wider stakeholder considerations can be value-destructive. In 1973, Klaus Schwab’s Davos Manifesto argued that management must also serve employees and society, […]
“Honesty is the first chapter in the book of wisdom.” That’s what Thomas Jefferson, Founding Father and third president of the United States, once said. If that’s true, then you might think that bankers are stuck on the first page, such is the public perception of them.
Following the 2008 global financial crisis, the reputation of bankers took a nosedive. […]
London-Paris, Barcelona-Madrid, Rome-Bologna – what is common among these city pairs? Surprisingly enough, travelling between these cities is faster by train than by plane. In fact, fast trains connect Europe quite well, allowing passengers to hop from city to city via rail.
Many passengers prefer taking trains over flying. One steps out at the city centre directly, wastes no time […]
In 2016 Dave Barnes, chief information and global business services officer of UPS, received a salary of $491,000 and a bonus payment of $251,000, while Pawan Verma, chief information and customer experience officer at Foot Locker, had a salary of $216,000 and a bonus of $664,000. Why in one case did the CIO receive the majority of his compensation in salary, […]
Hardly a day goes by without the national or international press publishing negative stories about social networks. Facebook has once more got problems in keeping the data of its more than two billion users under lock and key, or Mark Zuckerberg stands up another parliament in favour of a personal statement. YouTube, acting to protect children, disables the comment […]
CEOs in multi-business companies act as internal investors for business units. Our research suggests that they approach resource allocation in one of two very different ways. Liberal-leaning CEOs, seeking collaboration among units, are more likely to favour an even-handed approach when allocating resources. Conservative-leaning CEOs, seeking to spur competition, tend to favour merit-based allocations that may create large disparities […]
An economy where the highest paid business leader pockets £265 million for one year’s work, while the number of working families in poverty rises to a 20-year high, is one that needs to address its income gaps.
Denise Coates, the chief executive of gambling group Bet365, has been paid £265 million in 2017 at a time when many of those in […]
Only 5 per cent of major North American firms had a female CEO as of January 2018. (Catalyst)
Clearly women are underrepresented at the top level of corporations, but the reasons for this are less clear. In a recent article, we investigate two different paths to the scarcity of female CEOs:
Women are appointed as CEO less often; and/or
Women are […]
A puzzling feature of chief executive officer (CEO) compensation is “pay for luck”. Why are CEOs often rewarded when their firms perform well for reasons that are beyond their control? The dominant advice from academia is to do just the opposite: pay CEOs based on corporate outcomes they can substantially influence, which gives them incentives to make the good […]
In a recent Vox column, six antitrust consultants describe the European Commission’s case against Android, hailing it as a “milestone” of antitrust for the telecommunications industry (Caffarra et al., 2018). In fact, it is more of a millstone than a milestone.
The colloquial definition of “millstone” is a “heavy burden”, and of course the case is a burden for Google. But it is […]
We all know about the experts who know so much about so little, and so little about so much. Scientists and artists are prime examples of specialised occupations whose members are suspected of being impractical in daily life.
Managers, on the other hand, are supposed to have broad and practical knowledge, and to be flexible in what they do. These […]
Less than week after the European Commission hit Google with a record £3.9 billion fine for abusing its dominant position in Android, Google’s quarterly earnings report came in: a noticeable dip in profits — down to $2.8 billion from the expected $7.8 billion—but a rise in share price—up almost 6 per cent.
Investors seemed to shrug off the giant fine […]
It was the first meeting of a publicly traded gun company following the Feb. 14 school shooting in Parkland, Fla., that left 17 dead and sparked a wave of anti-gun activism. And the shareholders of Sturm Ruger delivered a surprise.
A coalition of Catholic nuns backed by the giant asset management firm BlackRock pushed through a proposal – over management […]
Sometimes CEOs misbehave. This misbehaviour has terrible consequences for the CEO, the organisation and society, yet still – they do it. Recent estimates suggest that fraud, a specific type of wrongdoing, results in a loss of 5 per cent of sales for a typical company every year and a global loss of about $3.7 trillion. With such clear consequences, […]
At first sight, Martin Sorrel’s departure from Wire and Plastic Products (WPP) — the company he founded and grew into an industry-changing and defining global force — underlines the importance and significance of independent-minded supervision of executive boards by non-executive directors. To many it appeared that the WPP board behaved impeccably when they appointed external legal advisors to investigate […]
Amongst the regular challenges of modern governance are the corporate scandals. These have affected almost every business sector, most recently of course the so-called disruptive Big Tech companies. It seems none of these social media technology companies are exempt from scandal. Google have been accused of abusing the dominance of its Android smart phone operating system and Apple were […]
This is the story of two cups of coffee, or at least that is where the story begins. The first, between me, Sandy Pepper, a Professor of Practice in the Department of Management at LSE, and Dr Susanne Burri of the Department of Philosophy, Logic & Scientific Discovery, took place in March 2016 in the Lundenwic coffee shop on […]
One distinct feature of the rise in income inequality over recent decades is the surging incomes of the working rich, particularly the pay of a class of top managers. A popular view stresses the role of performance-related pay in generating this feature. According to this view, the pay of many top managers is high-powered (i.e., with incentives tied to firm […]