Friday, April 23, 2010

Paul Light: What should not- for- profit leaders earn?

The American writer, academic, and author Paul Light has always been a thoughtful analyst of not-for-profit issues.

In a recent piece in the Washington Post Light explores the issue of excessive CEO compensation in the US not-for-profit and charitable sector.

Discussing the controversy over the million dollar salary paid to the CEO of a high profile, national not-for profit Light points to growing public concern over high salaries paid to CEO's and executives of not-for-profits.

The critical point Light makes is that CEO's in not-for-profits are public leaders who should be bound by a commitment to public benefit not self interest. High salaries send a message of largess and self interest inside the sector. Not-for profits, Light argues, must be diligent about maintaining a delicate balance between appropriate compensation and public concern.

In Australia more and more not-for-profit executives have a background in the private sector and government, where salaries levels are much higher. The extent to which this trend is forcing up salaries in the sector open to debate.

In Australia there is limited information available on remuneration levels in non-for profits. (Some information can be found here and here). The recent Enterprise Care Not for Profit Remuneration Report found that for the first time in nine years the average not-for-profit CEO remuneration fell, dropping nearly two per cent on 2008 figures (based on a survey nearly 1,800 positions in the not-for-profit sector during July and August of 2009).

Monday, April 19, 2010

Why we should be suspicious of corporate social responsibility

image courtsey of P.a.p-Blog

Interesting to read about the Edelman* Trust Barometer which tracks trust worldwide in institutions, including private sector industries, government agencies, the media and NGO's. The latest report found that trust in government and the private sector is low, and in many industry sectors is declining. NGOs remain the most trusted institution.

Discussing the implications of the findings, the Report authors urge the private sector to collaborate with the NGO sector to "exploit" their high levels of trust. Their conclusion is that corporations are likely to be trusted more if they partner with an NGO.

Here in a nutshell is an explanation for the growing corporate interest in "corporate social responsibility" and "community business partnerships". These are largely strategies of image management designed to overcome the poor image and reputation of corporations and business by attaching themselves to NGOs and causes.

* Edelmans is one the world's largest public relations firms