The Advisors' Blog

– Ridgway Barker, Kelley Drye & Warren

Here is a follow-up on Broc’s recent blog. In thinking about these issues, I think you also have to look at the composition of boards. Most companies, rightly, want to have CEOs, COOs, Presidents, etc. on their boards who can bring real world experience to deal with business issues – strategic planning, evolving markets, business restructurings, etc.

The issue that creates from a compensation point-of-view is obvious. And while compensation is important, clearly some of these other factors have an exponentially larger impact on value creation/loss for shareholders. One suggestion might be to require essentially a separate “board” to deal with compensation that draws on a broader universe of participants (and also includes some of the directors from the “real” board to provide the required insight vis-a-vis the other factors).