Wednesday, April 20, 2005
CORPORATE SCANDALS. Insatiable Greed at the Top?
. William Buckley Jr.: "Capitalism's Boil", NRO
William Buckley, the conservative writer and founder of National Review, blasts the three top managers at Viacom for awarding themselves between $52 and $56 million each as "compensation" for their work during 2004. The corporate scandals that began to emerge in 2000-2001 were generally attributed to "the imperial CEO", that is to say, to the lack of checks and balances at the (top) management level.
In a widely quoted speech before the Committee on Banking, Housing, and Urban Affairs of the Senate (July 16, 2002), Federal Reserve chairman Alan Greenspan asked himself rhetorically: "Why did corporate governance checks and balances that served us reasonably well in the past break down?" And he answered immediately:
At root was the rapid enlargement of stock market capitalizations in the latter part of the 1990s that arguably engendered an outsized increase in opportunities for avarice.
Buckley provides a wonderful illustration of John Adams's views about human nature: "unchecked passions" will always bring about corruption and bad management -- in business, in church, and in government (*). Adams also believed that passion intensifies and increases exponentially as one rises in the world, which is exactly what Greenspan is aluding to.
The words used by Buckley and Greenspan --rivalry, aggrandizement, humilitation, avarice-- were very familiar to Adams 200 years ago. Some things never change!
(*) In his notes on the Abbé de Mably's De la législation, taken in 1791, Adams wrote: "Avarice and ambition unchecked will work ruin everywhere." (See the excellent compilation by Zoltán Haraszti John Adams & The Prophets of Progress. Cambridge, Massachusetts: Harvard University Press, 1952, p. 133).
. William Buckley Jr.: "Capitalism's Boil", NRO
William Buckley, the conservative writer and founder of National Review, blasts the three top managers at Viacom for awarding themselves between $52 and $56 million each as "compensation" for their work during 2004. The corporate scandals that began to emerge in 2000-2001 were generally attributed to "the imperial CEO", that is to say, to the lack of checks and balances at the (top) management level.
In a widely quoted speech before the Committee on Banking, Housing, and Urban Affairs of the Senate (July 16, 2002), Federal Reserve chairman Alan Greenspan asked himself rhetorically: "Why did corporate governance checks and balances that served us reasonably well in the past break down?" And he answered immediately:
At root was the rapid enlargement of stock market capitalizations in the latter part of the 1990s that arguably engendered an outsized increase in opportunities for avarice.
Buckley provides a wonderful illustration of John Adams's views about human nature: "unchecked passions" will always bring about corruption and bad management -- in business, in church, and in government (*). Adams also believed that passion intensifies and increases exponentially as one rises in the world, which is exactly what Greenspan is aluding to.
The words used by Buckley and Greenspan --rivalry, aggrandizement, humilitation, avarice-- were very familiar to Adams 200 years ago. Some things never change!
(*) In his notes on the Abbé de Mably's De la législation, taken in 1791, Adams wrote: "Avarice and ambition unchecked will work ruin everywhere." (See the excellent compilation by Zoltán Haraszti John Adams & The Prophets of Progress. Cambridge, Massachusetts: Harvard University Press, 1952, p. 133).
# posted by Agustin @ 6:16 PM 
