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We take a state-stewardship view on corporate governance and executive compensation in economies with strong political involvement, where state-appointed managers act as responsible “stewards” rather than “agents” of the state.

We test this view on China and find that Chinese managers are remunerated not for maximizing equity value but for increasing the value of state-owned assets.

Managerial compensation depends on political connections and prestige, and on the firms’ contribution to political goals. These effects were attenuated since the market-oriented governance reform.

Economic reform without reforming the human resources policies at the executive level enables the autocratic state to exert political power on corporate decision making, so as to ensure that firms’ business activities fulfill the state’s political objectives.

As a powerful social elite, the state-steward managers in China have the same interests as the state (the government), namely extracting rents that should adhere to the nation (which stands for the society at large or the collective private citizens).

As China has been a communist country with a single ruling party for decades, the ideas of socialism still have a strong impact on how companies are run. The legitimacy of the elite’s privileged rights over private sectors is central to our question.

Chinese executive compensation stimulates not only the maximization of shareholder value but also the preservation of the state’s interests.

The Bureau of Economics in the Federal Trade Commission has a three-part role in the Agency and the strength of its functions changed over time depending on the preferences and ideology of the FTC’s leaders, developments in the field of economics, and the tenor of the times. The over-riding current role is to provide well considered, unbiased economic advice regarding antitrust and consumer protection law enforcement cases to the legal staff and the Commission. The second role, which long ago was primary, is to provide reports on investigations of various industries to the public and public officials. This role was more recently called research or “policy R&D”. A third role is to advocate for competition and markets both domestically and internationally. As a practical matter, the provision of economic advice to the FTC and to the legal staff has required that the economists wear “two hats,” helping the legal staff investigate cases and provide evidence to support law enforcement cases while also providing advice to the legal bureaus and to the Commission on which cases to pursue (thus providing “a second set of eyes” to evaluate cases). There is sometimes a tension in those functions because building a case is not the same as evaluating a case. Economists and the Bureau of Economics have provided such services to the FTC for over 100 years proving that a sub-organization can survive while playing roles that sometimes conflict. Such a life is not, however, always easy or fun.

First and second order learning lie at the center of an organization's ability to exploit its core competencies or explore for new opportunities. Strategic leadership lies at the center of this learning process. Strategic leaders enable organizations to learn by telling stories about what the organization is, what the organization does, and what the organization can become. They also enable competence carriers to come together to solve current and future problems by networking. These processes are explored.

This chapter examines the roles and challenges for the Irish economy in the aftermath of the collapse of the Celtic Tiger and the onset of the 2008 economic crisis. Specifically, it does review the role that Government, the Central Bank of Ireland, and the Financial Regulator had before, during and after the collapse of both the Irish banking system and property market. This chapter explains the drivers behind the growth of the Celtic Tiger and the sources of leverage that amplified the severity of the subsequent collapse. Specifically, this chapter focuses on the changes that have since been made and provides a review of the lessons that can be obtained from the collapse.

The results presented in this chapter are based on analysis of secondary sources and a literature review to determine conceptual and theoretical frameworks for identifying the specific issues that the Irish economy endured since the 2008 economic crisis and the red flags and signals that were either missed or ignored.

Combined with the subprime collapse of 2007 and the international sovereign debt crisis evident since 2008, Ireland and the actions of its regulators and policy makers undoubtedly generated not only a catalyst to financial ruin, but also an incubator to aid its severity. The precise drivers that created the Celtic Tiger remained unchanged and played a significant role in the subsequent collapse. Banks were leveraged towards the Irish property market and the role of leverage in financial markets created mispricing, to which the basic principles of the efficient market hypothesis (EMH) failed. This miscalculation of risk was severe and destructive for the real economy. The reward for this error was a place in history as an ‘I’ in the derogatory term ‘PIIGS’.

This chapter could be used as teaching material for undergraduate and masters programmes in economics and finance. It provides a response to further understand the behaviour of the Irish economy during the development of the Celtic Tiger and the subsequent financial collapse that enveloped the Irish state.

This chapter discusses the role of leverage throughout a financial system and the necessity for financial monitors to promote an environment of sustainability and financial endurance; that which can survive an international financial crisis event.