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A Theory of Boardroom Justice

LONDON – There is a real danger that corporate leaders, making decisions that seem correct behind closed doors, end up being tone-deaf in a soundproof room. When the doors open and the decisions are announced, it is clear that board members are often deeply disconnected from the world’s economic and social realities.

Consider executive pay packages. Board remuneration committees can explain them logically with complex formulas to justify them, and yet often they are completely out of line with common sense.