The question of bonuses has been around since 1890. It became popularised through the term ‘agency theory’, used from the 1920s onwards. The term described how an individual could incentivise an agent to act in the best interests of the investor – and recoup maximum profits. The assumption was, the more an agent was paid, the more incentivised they would be.
Where the task is obvious and the target clear, bonuses will work. However, when it comes to safety, this requires the individual to be aware of contingencies. For example, are they conscious of where the infrastructure is getting weak, but such weakness is not yet obvious and may not require immediate attention? Safety is a philosophy, a way of life. How can a bonus deal with that?
It is therefore concerning that BP is considering paying bonuses for safety when that is a [...]
Posts Tagged ‘research’
Should bonuses at BP be linked to safety?
Risk management at the Economist Risk Summit
I was invited to speak at the Risk Summit, hosted by the Economist Intelligence Unit (EIU), which took place on 18 th November in London. At the event I was asked to answer the question of how senior executives should view and manage risk now.
The event coincided with the launch of a report by the EIU: ‘Fall guys: Risk management in the front line’. The research, which formed the basis of the report, consisted of both an online survey of some 500 global executives and further qualitative research. It highlighted some interesting points which I have touched on below. I was fortunate to have some of my views outlined below expressed in the report itself.
58% of respondents said that the most important objective of the risk management function was identifying new and emerging risks.
Input from professional risk managers can [...]
Leadership Survey
Andrew and I, together with Dr. Isaac Mostovicz of Janus Thinking , are in the process of developing a leadership questionnaire. We would like to test and validate the questionnaire so far before we proceed any further. Can you spare 10 minutes and test out our survey? Click on the following link to take it:
http://www.surveymonkey.com/s/leadership_opinions
Thanks very much.
