Organic risk management: discussing executive performance versus remuneration

Abstract

Enron … Anderson … WorldCom … General Electric … Robert Maxwell … The mere mention of these names instills fear for even the most saintly board of directors. Why? Because each disaster can be pinned down to the very heads of the companies involved. Most companies believe they have procedures in place for such an event any executive number scrambling can be caught at internal audit, or through risk management, surely? But did this stop the fiasco's in recent years, such as Enron, and across the water, Vivendi? It is generally believed that the stock market price of a company is relative to its performance, but until a scandal is uncovered, the market price remains high, not reflecting real performance at all. Once it hits, the fallout spreads to all shareholders and investors, not only those directly involved.

Citation

(2004), "Organic risk management: discussing executive performance versus remuneration", Journal of Risk Finance, Vol. 5 No. 4, pp. 32-33. https://doi.org/10.1108/eb023011