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Good governance means having great people at the top looking out for the company. But how much should a company pay for a good director? In this TV show Caroline Newsholme discusses pay vs performance.
You should certainly pay for talent. And good directors come at a price. But there’s a feeling that directors remuneration is slightly out of kilter with the real world. It’s certainly being increasing, notwithstanding the fact that we are in a recession, there’s been a quite substantial upwards trend
And obviously a lot of companies have struggled and may not have performed as well. So there there’s an inconsistency between actually the wellbeing of the company and what the directors are being paid.
But I think certainly directors are alive to the concerns that have been voiced by investors and the business world generally. I don’t think they are blasé about the position, they recognise that there has to be a proper link between pay and performance and we can’t continue to see excess packages which are not really justified. Whether we’ll get change at the rate we need change is another question.
But there’s a lot of impetus in the corporate world to increase transparency and to change what’s gone before.
Inside Finance TV will continue to follow ideas around corporate governance issues. Follow @InsideFinanceTV for more discussion. Watch the full briefing From the top – Ensuring board effectiveness as a director
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