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The Forum > Article Comments > Global poverty does nothing for global stability > Comments

Global poverty does nothing for global stability : Comments

By Australian NGO Chiefs, published 29/10/2008

The urgency to tackle the financial crisis is in stark contrast to the foot-dragging and broken promises over poverty alleviation, human rights and climate change.

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Pericles,

In my work I can see the difference between someone with a in depth understanding of the issues and those that are merely competent. We have just completed a overhaul of design provided to my client by consultants and have stripped out $4m of overdesign and complication and built a system that is easier to run and maintain.

This required a couple of months of our time for a small fraction of the savings, and is why in spite of our high fees we cannot meet demand for our services.

Likewise an exception CEO will boost his company's profits by far more than his renumeration.

I don't have an adulation for "executive work" as you put it, but admire competence in all fields and the ability to work beyond standard abilities.

The reason CEOs are paid so well is that very few can do what they do, and is the same reason that Picasso paintings go for $30m.

Explaining this to someone with no experience is like talking about sex to my 5 yr old daughter. Her response is similar to yours.

"Yuck, why would anyone want to do that."
Posted by Shadow Minister, Friday, 31 October 2008 12:40:05 PM
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Shadow Minister, the real truth is that no matter how much CEOs
are paid, many are still monkeys, so its not the money that is
the issue.

All this of course came about by the American system, where
"consultants" were paid to advise on salaries. No doubt by
advising that huge ones were paid, they would get the job again
the following year.

Has it worked? Absolutalty not.

http://www.manifest.co.uk/news/2004/20040510Forbes.htm

Some 2003 figures of salaries to CEOs of major world companies.

Note that the CEO of UBS went on to nearly bankrupt the bank with
losses, he was on nearly 7 million.

Yet the head of Toyota, earning less then a million, heads the
world's most successfull MV company, whilst his American, highly
paid CEO mates at GM and Ford, have driven their companies to
within an inch of bankrupcy and the story is not over yet.

So your theory is flawed, as we see a world of highly overpaid
CEOs, who are little more then monkeys, running away with huge
salaries, as they drive their companies into the ground. On the
way out, the golden handshake or parachute, usually awaits. Ha!
Posted by Yabby, Friday, 31 October 2008 12:55:11 PM
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Yes, I too have found that the execs are an offensively over-rated bunch - the authors not excepted. The money they get is probably best understood as part of a feudal system: "who's your daddy", mentor, society patron, etc., all prevail over brains, agility and character. Yabby's reference to corporate failure is not just some apocryphal scuttlebutt: most of such shocking corruption is so routinely managed in-house that it does not even reach the gossip lines of urban myth.

The greater the pay, the more likely that it will lure the greedy, stupid, dishonest, arrogant and psychopathic. What is needed badly are certain measures of sacrifice, humility, courage and empathy - that last quality being a most useful type of imagination, and best sourced from those who seek to understand and respect subordinates. Such qualities always prove a far better guide to those better suited to leadership.

Instead we get people like Peter Costello, who proves again how affirmative action works for the mediocre, this time with an appointment to the World Bank For "anti corruption"!

Based simply around his record of cowardice, "Tip" Costello hasn’t even got the bottle to head a primary school cricket team; such breathtaking embarrassment that people kept mentioning his name and the word "leadership" in the same sentence for so long! It seems that so many supported him because they liked the idea that if people just want something so much then that should be enough. Kinda describes their nasty dumbass ideology too really.

Then there's Malcolm Turnbull heading the Libs! Amid this crash, they’re keeping a straight face selling his "credibility" as an economics guru because he was a leading dealer with Goldman Sachs Oz. By that perverse measure, Turnbull as PM in the Ubercrash would be like getting Ivan Milat as Chief of Police to tackle a massive wave of violent crime.
Posted by mil-observer, Friday, 31 October 2008 2:06:41 PM
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Is this getting getting confusing, Shadow Minister, or is it just me?

I'm trying to fathom the relevance of this contribution of yours, to the issue of executive remuneration in the charity industry.

>>We have just completed a overhaul of design provided to my client by consultants and have stripped out $4m of overdesign and complication and built a system that is easier to run and maintain.<<

I'm not entirely sure what it illustrates.

Was the CEO in this equation smart or stupid?

Did he do a lousy job first (giving it to ineffective consultants) then redeem himself by getting you to streamline the design?

Either way, if the savings on the system were $4m, the scale of the project is far above any required to run a charity. Think of the variables involved, then match the skills required to manage those variables against the capabilities of your averagely successful mortgage broker.

I think you'll find there's not much daylight between them.
Posted by Pericles, Friday, 31 October 2008 3:15:55 PM
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Yabby, Pericles and others,

For every one company that goes to the wall there are hundreds of others that excel doing things better than before.

The ones that failed probably improved efficiencies 20% whilst the opposition increased by 50%.

Market conditions and other variables often have as much to do with it as CEO compentencies.

The CEO of the red cross handles hundreds of millions, and a kindly but only reasonably competent manager will get far less done than a highly skilled one. And with that kind of money the savings would be in 10s of millions. A few hundred k a year to get that person is well spent.

If this confuses you still Pericles, I cannot explain it in smaller words.

For highly skilled managers of charities who are giving up a substantial portion of their earnings and sacrificing the prosperity of their families to be criticised by people who probably donate less than 1% of their earnings is a little rich.

all I see is jealousy and spite against those that least deserve it by those who sancitmoniously hold them up to values that I highly doubt they come any where near themselves.
Posted by Shadow Minister, Sunday, 2 November 2008 12:23:54 PM
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Yeah: "you're just jealous, not good enough, don't understand the rarified air of funny money we oligarch parasites inhabit", etc.

Shadow, can you enlighten us all on how we should regard the great "efficiencies" and achievements of excellence by such outfits as Bear Stearns, Lehman, AIG, WaMu, Northern Rock (can we keep going)? How did such unproductive firms of usurers justify annual bonuses of up to USD 1 billion for certain execs?!

And how's that derivatives bubble brewing lately? And how to explain the great "efficiencies" achieved by such speculative rubbish when their very (short-term!) survival now depends on bail-outs by prostitute-politicians and infiltrating usurer-apparatchiks like Paulson?
Posted by mil-observer, Sunday, 2 November 2008 5:01:01 PM
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