400 Aurovilians participated in the voting

A...C....B Written by Radio Team Wednesday, 18 March 2009

In today's news an excerpt of the General Meeting and Resident Assembly concerning the choice on the proposals concerning the selection of the new Auroville Council. While the votes are still being analysed we can say that proposal A is leading followed by proposal C and B. Proposal A as you can check in our previous editions indicates that the residents nominate candidates following a precise job descriptions and a selection committee composed by members of the previous WC and AVC choose between the nominated individuals. Almost 400 Aurovilians participated in the voting. To download the news click here.

The corporate world remains the last bastion of dictatorship

Corporate reforms from The Big Picture by T T Ram Mohan
Leave aside the big talk of 'reforming capitalism'. That means all things to all people. Concretely, what can one expect by way of reforms in the corporate world? From a recent story in the FT, I flagged the following:
The US Congress has voted to give shareholders an annual vote on executive pay, although this will be a non-binding vote
Shareholders may get the right to nominate candidates to the board- and to remove non-performing directors. These have been management's prerogative so far
Redesign of executive compensation with less liberal stock options for people at the top.
An improvement in the composition of corporate boards- board members will need to demonstrate better expertise than playing golf.

Is that good enough? Well, it's a good start. But I am a bit of a radical when it comes to corporate reform. I happen to think there is a fundamental problem with the modern corporation: excessive concentration of powers in the CEO. The world over, democracy has gained ground at the level of nations.

But the corporate world remains the last bastion of dictatorship. Greater diffusion of powers and more participative decision-making are what companies lack - and which is why they are prone to disaster. Serious reform is making these things happen.

The fundamental human need for stability

Flawed b-school ideas from The Big Picture by T T Ram Mohan
It's interesting that there has been much finger-pointing towards b-schools in the massive debate on capitalism prompted by the present crisis. In the Satyam episode, some of the outrage stemmed from the realisation that two b-school dons were on the board. As I have pointed out in earlier blogs, I don't really buy the stuff about 'excessive' focus on shareholder value and how b-schools have gone wrong in overemphasising this aspect of capitalism. For a change, I came across something more sensible in this article by Richard Layard of the LSE's Centre for economic performance. Lord Layard points out three b-school ideas that need to be questioned:

Three ideas taught in business schools have much to answer for. One is the theory of “efficient capital markets”, now clearly discredited. The second is “principal agent” theory, which says the agents will perform best under high-powered financial incentives to align their interests with those of the principal. This has led to excessive performance-related pay, which has often undermined the motive to work well for the sake of doing a good job and introduced unnecessary tension among colleagues.

Finally, there is the macho philosophy of “continuous change”, promoted by self-interested consulting companies, which disregards the fundamental human need for stability – in the name of efficiency gains that are often not realised.