Corporate Boards Could Be Held Liable for Excessive Executive Pay, the Chief Justice of the Delaware Supreme Court Tells Harvard Business Review.Business Editors BOSTON--(BUSINESS WIRE)--Jan. 2, 2003 Signaling the possibility that shareholders could successfully sue boards of directors over executive compensation, E. Norman Veasey, the chief justice of the Supreme Court of Delaware, says that corporate directors could be held legally liable if they fail to act in good faith when setting executive pay packages. Veasey's comments, which appear in a roundtable on executive compensation in the January issue of Harvard Business Review Harvard Business Review is a general management magazine published since 1922 by Harvard Business School Publishing, owned by the Harvard Business School. A monthly research-based magazine written for business practitioners, it claims a high ranking business readership and , indicate that the courts may be more receptive than they have been in the past to shareholder complaints over executive pay. Veasey's comments are especially significant because Delaware, where Veasey presides, is the state where most leading U.S. businesses are incorporated. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Veasey: "If directors claim to be independent by saying, for example, that they base decisions on some performance measure and don't do so, or if they are disingenuous or dishonest about it, it seems to be me that the courts in some circumstances could treat their behavior as a breach of the fiduciary duty Noun 1. fiduciary duty - the legal duty of a fiduciary to act in the best interests of the beneficiary legal duty - acts which the law requires be done or forborne of good faith." Veasey goes on to say: "I would urge boards of directors to demonstrate their independence, hold executive sessions, and follow governance procedures sincerely and effectively, not only as a guard against the intrusion of the federal government but as a guard against anything that might happen to them in court from a properly presented complaint." Veasey was one of 12 participants in the roundtable, "What's Wrong With Executive Compensation?" which was convened by HBR HBR Harvard Business Review HBR Harbor HBR High Bit Rate HBR Human Behavioral Representation HBR Heijmans Blackwell Remediation HBR Hydrobromide Acid HBR House Budget Resolution HBR Hybrid Block Repair HBR Host-Based Replication and the University of Delaware's Center for Corporate Governance Corporate Governance The relationship between all the stakeholders in a company. This includes the shareholders, directors, and management of a company, as defined by the corporate charter, bylaws, formal policy, and rule of law. and was moderated by Professor Charles Elson, who heads the center. The panel also included: Jamie Heard, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Institutional Shareholder Services, Edgar S. Woolard, Jr., former CEO of DuPont, and Joe Bachelder, a leading compensation lawyer. The roundtable appears in Harvard Business Review's special January issue, "Motivating People: How to Get the Most From Your Organization." Other articles in the issue include: "Beyond Empowerment: Building A Company of Citizens" by Brook Manville and Josiah Ober. The authors argue that it's time It's Time was a successful political campaign run by the Australian Labor Party (ALP) under Gough Whitlam at the 1972 election in Australia. Campaigning on the perceived need for change after 23 years of conservative (Liberal Party of Australia) government, Labor put forward a to update managerial and governance systems so that they are in sync with knowledge economy. And the city-state of Athens may offer just the right model. "How To Motivate Your Problem People" by Nigel Nicholson. The most intractable employees take up a disproportionate amount of a manager's time. Yet the best hope for getting the most out of them is to let them motivate themselves. About Harvard Business Review Harvard Business Review is a leading magazine of business thought and practice. Published 12 times a year, the magazine has a paid circulation of 243,000 and is available on newsstands. Based in Boston, Massachusetts “Boston” redirects here. For other uses, see Boston (disambiguation). Boston is the capital and most populous city of Massachusetts.[3] The largest city in New England, Boston is considered the unofficial economic and cultural center of the entire New , Harvard Business Review is a business unit of Harvard Business School Publishing Harvard Business School Publishing is a not-for-profit, wholly owned subsidiary of Harvard Business School. It operates as an umbrella corporation to manage a group of publishing products associated with the School, including Harvard Business Review (management journal), Harvard , a wholly owned, not-for-profit subsidiary of Harvard University. Website: ww.hbr.org. |
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