Daily Archives: March 12, 2019

Chief executives’ pay: reversing the race to the top

Eye-watering remuneration for chief executives is economically wasteful as well as socially divisive. Non-profits should pioneer compressed wage hierarchies.
By Alex Bird – As Oxfam reports that the top 1 per cent of the world’s population now own more than the other 99 per cent, it’s time to think about how those at the top of the economic tree can secure such eye-watering salaries, which they parlay into wealth.

Whereas in the past individuals became recognized by their status in the community rather than in cash, and for their philanthropy—such as Carnegie building libraries, or business people supporting the local football team—now driven individuals seek recognition through possessing conspicuous wealth.

This recognition drive is reinforced by remuneration committees, which are the method of setting top salaries recommended in the UK by the Financial Reporting Council. They employ specialist consultants to survey what others are paying, adjust for industry and turnover, and so arrive at a ‘market price’. Any executives earning less than this rate get a rise; anyone earning more is left alone, as their contract locks them in to that salary. Industry rivals see this change, redo their own surveys and the upwards-only merry-go-round progresses.

This, naturally, has led to an increasing disparity between the highest and average earnings. more>

Updates from Chicago Booth

Purely evidence-based policy doesn’t exist
By Lars Peter Hansen – Recently, I was reminded of the commonly used slogan “evidence-based policy.”

Except for pure marketing purposes, I find this terminology to be a misnomer, a misleading portrayal of academic discourse and the advancement of understanding. While we want to embrace evidence, the evidence seldom speaks for itself; typically, it requires a modeling or conceptual framework for interpretation.

Put another way, economists—and everyone else—need two things to draw a conclusion: data, and some way of making sense of the data.

That’s where modeling comes in. Modeling is used not only to aid our basic understanding of phenomena, but also to capture how we view any implied trade-offs for social well-being. The latter plays a pivotal role when our aim is to use evidence in policy design.

This is intuitive if you think about the broad range of ideas and recommendations surrounding macroeconomic policy and the spirited, sometimes acrimonious way in which they’re debated.

If everything were truly evidence based, to the extent we can agree on the accuracy of the evidence, why would there be such heterogeneity of opinion? The disagreement stems from the fact that people are using different models or conceptual frameworks, each with its own policy implications.

Each of them might be guided by evidence, but policy conclusions can rarely be drawn directly from the evidence itself. more>

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Updates from Ciena

Following the 3-pillar approach to effective security strategy
Large-scale data breaches are reported in the press almost daily, with devastating consequences for the organizations and individuals involved. A multi-layer security strategy minimizes cybersecurity risks for your organization and streamlines the compliance journey in the run-up to upcoming legislation.
By Paulina Gomez – Technology innovation – the continued evolution of cloud computing, the rapid increase in Internet of Things (IoT) and the growth of Artificial Intelligence (AI) – is expected to drive a 100x increase in connected devices and a 1,000x increase in data traffic by 2020 (2016 Mobility Report, November 2016, Ericsson). Each new device doesn’t just drive traffic, it also dramatically expands the network attack surface – increasing the opportunity of cybercriminals to leverage sophisticated methods to exploit these opportunities.

In response to the rapidly evolving cybersecurity threat landscape, regulations around the world are upping the pressure on organizations to protect their sensitive customer and operational data. The maximum fine for a data breach in the upcoming European General Data Protection Regulation (GDPR), for example, could be up to 4% of global revenues; enough to put even large organizations out of business.

How can an organization minimize its security risks? It’s about more than just encryption and firewalls. A comprehensive, multi-layer security strategy is vital to an effective defense.

By following these three key pillars to achieve the confidentiality, integrity, and availability of data in your network, you will be protecting your data, your customers, and your business. more>

A new generation of young managers is reshaping how we work

By Stephane Kasriel – No matter where you look, so much rapid change is happening that even how companies manage their talent strategy is shifting. Gone are the days of HR managing workforce planning with an Excel spreadsheet. To remain not only competitive but relevant, more companies are turning to detailed workforce plans, and younger generations of managers are much more likely to be putting these plans in place. As they do, and as they ascend to more senior roles, they’re reshaping the future of work.

More than half of younger generation managers polled see future workforce planning as a “top priority” for their departments–nearly three times more than their baby boomer counterparts, according to my company Upwork’s 2019 Future Workforce Report.

Whereas baby boomers are known for keeping their employees close, millennials, who now make up more than half the U.S. workforce, overwhelmingly desire “flexible and fluid” work settings.

Younger generation managers are also more likely to see it as an individual’s right to work remotely. After all, they’ve grown up in the digital era. They do not understand why someone should be tethered to a desk nine-to-five if modern technology frees them to work anytime, anywhere, and from any connected device.

In fact, many believe they are more productive working remotely than they would be in rigid office environments with all of their distractions. more>