Unskewed incentives: making governance work

Better board representation, an independent CRO, reformed compensation and safeguards around auditors and rating agencies will all help improve risk governance

Money cogs

Before and during the crisis of 2008, many bank managers, board members, auditors and rating agencies somehow managed to contribute, as if through a concerted effort, to one of the largest speculative bubbles in history. What did all these people have in common? Strong and well-aligned incentives.

Incentives matter – and not only to managers but to shareholders and directors too. When managers’ remuneration is mainly equity-based and shareholders are dispersed, both will favour a riskier

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

Most read articles loading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here