Friday, January 30, 2009

Being Nassim Nicholas Taleb VI

"Scandalous! Why do they keep their bonuses," Taleb asks? He makes the significant point that executives like Stanley O'Neal, after tanking Merrill Lynch, has kept his bonus--not to mention those who got bonuses of $18 BILLION just last year while their hands were out and small businesses were closing all over America. With the Bank of America bailout, we have essentially bailed out Merrill Lynch and not held O'Neal accountable. This is Taleb's point.



Stanley O'Neal is now on the board of Alcoa, Inc, "one of the world's largest producer of primary aluminum, fabricated aluminum, and alumina," according to its website, after having served on the board of General Motors from 2001 - 2006. Did General Motors not just receive a massive bailout? Are these board members rewarded for inefficiency?

What's the matter with these large companies? Tank a company, run away with billions, and reward these with board positions where they are likely to allow more of the same. No wonder nothing changes. But we can change. Let's hold the board members responsible and give no more money to companies who seat the likes of these on their boards.

10 comments:

Catvibe said...

Judith my friend, I am awarding you with The Lemonade Award. Please pick it up at my site.

judith ellis said...

Hi Cat - Thank you for the award; it's appreciated.

Dave Wheeler said...

Judith,

Tough to argue with that logic. I think I read a Paul Begala post that advocated bringing back the placing folks in stocks in the public square for business people with these types of performance results.

Reward the incompetent, penalize the working folks. One needs to be degreed to run a company....why?

judith ellis said...

Dave - One will never get me to speak about the importance of college or the necessity of a good education. But I do believe that one does not need to necessarily have a college degree to be a great leader or to increase the value of any company. However, it is one of the criterion that I look for when hiring along with others.

College is important for a number of reasons. Some like to point to Bill Gates, or the other successful entrepreneurs, as one who did't finish college and who became a great success. This is not the norm. Let's not throw the baby out with the bath water.

I'd be for the public square if the public square exhibited wisdom and understanding, which many of these executives seem not to have. But then again perhaps it was simply greed and fat fees. Many may have known exactly what they were doing. I hold the board members largely responsible for the rampant incompetence.

wmmbb said...

Bravo Judith for your supporting the importance of tertiary education. Credentials represent, at a minimum, strengths,weaknesses and application.

Fundamental question: What is education for?

dave wheeler said...

Judith...I too believe education is a necessity for success but things like character, ethics, and integrity aren't learned in the classroom. A degree gets access to an opportunity. The others are things learned through life and it's experiences.

A degree makes one neither smart or successful. It's one's actions that translates the knowledge and theories into excellence. The barriers many folks have to getting a good education are varied and many. It's not just financial, it's about time, one's workplace, one's parenting or family status. It would be terrific to somehow increase access to a quality education for all folks, beginning in the public schools in every community as they are critical to economic growth and development and to working people whose responsibilities cause different types of barriers. Progress could be measured by increasing the number of folks qualified for jobs requiring degrees. It might take longer for "blue collar" folks to get there but most will get there prepared and correct.

judith ellis said...

Good question, wmmbb. For me, education is enlightenment; it is for the betterment of self and others. Education is learning, though it is not necessarily wisdom. Wisdom is the principle thing.

judith ellis said...

Thanks, Dave. Good points here. A question: How does one get relevant knowledge upon which to act? Study is most certainly a part of the judgment needed for actions that matter. Anybody can act, but will it make a difference? Again, there are many factors that go into hiring; a degree is only one of these, though for me it is an important factor. Life experiences and passion are pretty high on my list too.

I conducted interviews rather loosely, but believe me when I say I was focused like a laser beam on every aspect of the interviewees from the way they answered questions, to body language, to tone of voice. When did the voice ebb and flow? Was there ever a spark in the interviewee’s eyes? Are they inquisitive? Are they inviting? Do they know when to speak or not? Are they volunteers?

Once I ran a very large hotel that I and a partner were seeking to purchase. Not one person that I hired was a disappointment. Now, those who were hired before I arrived were a different story.

dave wheeler said...

Great question...I think it's a combination of education and experience. Many job postings now have education and experience criteria by which experience can "substitue" for some part of the education requirement.

judith ellis said...

I would not like for young people to have substitutes. They need to go to college or trade school, preferably the former. But all will not go; this is obvious and other avenues should be made for these.

If you are middle age and you chose not to go to college, so be it--though you should be required to do ongoing training, as should all. Customer service and soft skills training should be offered on an ongoing basis. People seem to lapse into bad behaviors rather quickly if not reminded.

In my opinion, young people should be encouraged to pursue higher education. I do, however, understand from whence your ideas come and appreciate them.