You can copy and paste this URL.
This URL will permanently link back to this page.
University of Phoenix Professor of Corporate Governance, Dr. Milton Luoma, has noted that corporate share ownership has become more widely dispersed over a broader base of shareholders than it had been at the end of the 19th century and the early 20th century (Luoma, 2008). This has led to more a more freewheeling attitude among CEOs who feel less of an obligation to act in shareholders' best interests and puts less pressure on boards of directors to more closely watch out for their shareholders' interests.
As mentioned above, there has been considerably less pressure on boards of directors to look out for the interests of the shareholders. This has been especially true during the spate of scandals during the early 2000s and even more recently during the current recession which began with the collapse of Countrywide in August 2007.
Incredible collusion has occurred among some senior executives, accountants, auditors, and sometimes even with board members to line their own pockets and to provide CEOs and other senior executives multi-million bonuses even in the face of rapidly decreasing profits and employees getting laid off. Frankly speaking, some senior executives and boards of directors have often left investors “hanging out to dry” by looking out for their own interests only and by not attempting to generate profitable outcomes for the stockholders.
Another significant factor that has contributed to corporate-governance problems has been the increasingly monocular focus on quarterly profits only without due consideration given to ways of creating and sustaining profits over the medium and the long-term. Medium and long-range strategic planning is often given very short shrift in the headlong rush to make as much money as possible in as short of a period of time as possible.
Such shortsightedness often prompts senior executives to cut corners in terms of employee and managerial training which adversely affects employee performance and productivity that often results in the inferior quality of the products produced and customer dissatisfaction that adversely affects sales and the corporate bottom line. Additionally, a fanatical focus on quarterly profits often weakens an organization’s commitment to corporate social responsibility (CSR) which is an integral part of any entity’s long-term success and welfare.
People, people, and people are the keys to any organization’s successful corporate governance over time. People in terms of employees and managers; people in terms of the board of directors and people relative to the shareholders. Historically, companies that have put people first have long outlasted those which have not. Money should only be a means to an end, not the end itself.
(Source: Dr. Milton Luoma, Professor of Corporate Governance, University of Phoenix, Lecture, August 23, 2008).
This new Article is not yet ready for syndication. Please check back in a few minutes.
This Article is not available for syndication. Contact BestThinking for details.
Enjoy high quality content through BestThinking's syndication program. Learn more and register as a publisher today!
Enhance your publication, blog or journal with high quality content from BestThinking. Whether you are looking for a single feature article, a stream of dynamic content or just a few pieces each month, BestThinking's unique, customizable syndication feeds provide rights-verified material from identity verified Thinkers.
To syndicate a Blog or Article, you’ll need to start by setting up a feed. Creating a feed is a 3-step process:
About the Author
Dave S Morse
I've completed a Masters of Management in Public Administration at the University of Phoenix and am seeking to enter the field of social and
Though advances have been made in the reduction of chronic homelessness, transitory, or cyclical, homelessness remains a scourge nationwide. Because of severe underemployment, many hardworking people have to stay with friends or relatives on a regular basis. Creation of hundreds of thousands of...
Theory E vis-à-vis Theory O Theory E espouses organizational change based on economic value whereas Theory O commends entity change founded upon organizational value (Harvard Business Review, 2000). Though the tide is beginning to change, most companies in the U.S., particularly large ones,...
A Blinkered Focus on Profitability Senior corporate leadership, boards of directors, and shareholders often have a monocular focus on the short-term bottom line and in the interest of “profitability” make extremely poor decisions relative to downsizing. Oftentimes, companies engage in...
HRIS technology drives organizational success in that it enables the speeding up of human-resource administrative procedures which enable more accurate and rapid tracking of the best matched, and most well-qualified, candidates for a particular position and frees HR staff from the mundane.
This article examines gaps of perception that often exist between Boards of Trustees/Chancellors in Community College Districts and the constituents they serve. Such gaps are most acute between Boards/Chancellors and colleges which serve poor communities, especially in how budget cuts are applied.
This article highlights four staffing models which are essential for the recruitment and retention of the best qualified and most well-matched personnel to meet the staffing needs of organizations and to keep them competitive and growing over the long-term.