As news about the number of jobs being lost around the nation becomes ever more dismal, it’s interesting—and encouraging—to see discussion of the false assumptions that underlie our social choice to reward the big woman or big man at the top lavishly, while underpaying those who do the real work to keep an institution going. And then freezing their pay or cutting their jobs when things become tight—as we continue grossly overpaying the big woman/man on top.John Aravosis’ America Blog has an interesting discussion today of how to determine the worth of CEOs (www.americablog.com/2008/12/what-is-proper-value-for-ceo.html). It links to a blog discussion at the New York Times in which Andrew Ross Sorkin also asks how we put a value on a CEO (http://dealbook.blogs.nytimes.com/2008/12/02/putting-a-value-on-a-ceo).
Sorkin notes that Wall Street has long fostered the myth of “pay-for-performance meritocracy.” That is, the big woman or big man on top deserves the big bucks because she/he merits them—works harder, achieves more, is more ruthless about decision-making than anyone beneath her or him.
However, as the public begins to examine the discrepancy between what the big woman or big man on top actually achieves (beyond rhetoric, smokescreens, and cooked books), consternation arises. As Lucian Bebchuk, director of the program on corporate governance at Harvard Law School, says, “What has caused the most outrage is the difference between pay and actual performance.”
There is a growing sense that we have been paying people huge salaries not to do outstanding, but shoddy, work. We are bailing out those who do conspicuously bad work, while cutting the positions of those who have worked hard to keep corporations or institutions afloat.
The discrepancy in how we value the worth of one worker (at bottom) as against another (at top) is outrageous to many of us, and that outrage is growing as we recognize that we taxpayers will now be funding the buyout. We will be funding the system of false meritocracy.
Hence the discussion: how do we—we who are now footing the bill—decide how to reward the big woman or big man on top? John Aravosis adds further considerations. He notes that, while the big woman or big man at top often does not perform adequately, he or she is adroit at creating an inner circle characterized by chummy relationships. As long as money is flowing, no one asks questions about these self-serving patterns of CEOs intent on creating a circle of chums who massage their egos, and who receive financial rewards for doing so, not for outstanding performance or hard work.
As readers of this blog know, I have tracked these questions about CEO pay from the standpoint of a theologian who has worked primarily in church-owned colleges and universities (see, e.g., http://bilgrimage.blogspot.com/2008/10/leadership-crisis-role-of-american.html, http://bilgrimage.blogspot.com/2008/10/collaboration-and-better-angels.html). I am particularly concerned about how the business model of the CEO—the big woman or big man on top—has been inappropriately applied in churches and in the academy. In my view, the adoption of the big woman, big man on top model by the academy has been an unmitigated disaster.
It has assured that universities are often run by ruthless, power-hungry, egotists who do not understand or value academic life. When those academic big men/big women on top serve church-owned institutions and govern these according to the playbook of a business CEO, they commonly sell out the core values of the faith-based university. Their attitudes towards co-workers, their respect for the fundamental human rights of their employees, their commitment to collaboration, to mission, to empowering others: these often shockingly contradict the core values of the institutions they claim to serve.
Because the pay-for-performance-meritocracy rule of thumb by which our economic system justifies grossly overpaying the big woman or big man on top is mythic—because the real performance of the big men and big women often does not merit such gross overpay—one of the core corruptions the CEO model introduces into academic life is cultivated blindness. It asks faculty, staff, and students in academic institutions to pretend: it asks them to collude in a conspiracy of silence about the poor performance of some university presidents and their teams, and to act as if the president and her or his team merits gross overpay simply by virtue of being on top.
This conspiracy of silence has a particularly corrupting effect on academic institutions because academics are trained to look, to think, to critique. When an academic institution is asked to play the empress (or emperor) with no clothes game, when those within a values-based academic institution are asked to tiptoe around critical questions about malfeasance at the top, an institution begins to decay from within. Academic leaders can hardly challenge students to be bold about asking values-centered questions or about critiquing corruption while they themselves remain silent about the discrepancy between a big woman or big man’s performance and her or his pay.
Or about the persistent tendency of the big woman or big man on top to blame anyone but herself or himself when things go wrong. As Father Geoff Farrow notes in a posting to which I linked yesterday, corporate culture actively encourages the CEO to deny failure and to blame it on someone else (http://fathergeofffarrow.blogspot.com/2008/12/checking-rearview-mirror-before-driving.html). As he also notes, this pattern of corporate culture is inherently corrupting. It enables those at the top to get away with murder. And to be rewarded lavishly while as they do so.
As I have argued in previous postings about this issue, it is time for universities—and, in particular, faith-based ones—to examine the presuppositions of the business-based CEO model in academic governance. It is time to examine those presuppositions critically. They are not serving academic communities well. They are permitting leadership that is herding some universities to the brink of failure.
We are a turning point in our culture, vis-à-vis models of leadership. The culture at large is hungry for new leadership paradigms. That hunger drove the recent elections, leading a majority of Americans to reject the failed model of pay-for-performance-meritocracy in our government. This political turn is part of a wider turn in our culture as a whole.
We are starved for viable models of leadership. For leaders with integrity—in government, in business life, in faith communities, in universities. In a period in which our lack of good leadership models throughout our culture is having negative effects everywhere, it is imperative that we begin now to look for new paradigms. Because of the role they play in sustaining a vibrant democracy,* academic institutions have a critically important obligation to foster and model good leadership (see http://bilgrimage.blogspot.com/2008/09/open-letter-to-barack-obama-hbcus-and.html and http://bilgrimage.blogspot.com/2008/12/characteristics-of-good-leaders-mary.html).
* On the foundational significance of institutions of higher learning in imparting the values necessary for democracy to thrive, see the significant 20th-century educator Dr. Mary McLeod Bethune, founder of Bethune-Cookman University, who notes in her "Spiritual Autobiography," “In this atomic age, when one small materialistic possession has wrought fear among peoples of the world, I am convinced that leadership must strive hard to show the value of these spiritual tools which are as real as anything we touch or feel, and far more powerful."
