A couple of months ago Thomson Corporation made a bid for – and was accepted by – Reuters for a whopping $17 billion and change. My employers, Thomson Financial, a market group within Thomson Corporation will become Reuters once the deal is approved by the regulators. Thus it was not quite without reason that I started reading Tom Glocer’s blog. For the uninitiated, Mr. Glocer is the current CEO of Reuters and Chief-in-the-wings for the Thomson-Reuters combine. Mr. Glocer’s blog is a pioneer idea in transparency of thought and action – I don’t know of many CEOs who run public blogs. He writes well too (has to, right? Isn’t he the boss of a zillion and a half super journos at the most respected member of Fleet Street?). Now with all that corner-office-pleasing stuff out of the way, I want to turn attention to his recent post on China and its careful balancing act of socialism and market economy.
Mr. Glocer takes cognizance of the dilemma that governments face with public welfare, especially in income distribution and equality. The conundrum here is whether to rob Paul to pay Paula or trying bringing Paul and Paula to an equal social and economic standing. Straying clear of taking a stance, he quips towards the end of the post that he’ll stick to running companies. It is not that corporate management is free of this predicament. General compensation and executive remuneration has been a sensitive matter, leading to much discussion and even more controversies in any implementation. The question is whether employees are happy with their absolute wage increases or do they also keep a close watch on the chasm between different layers in the organization. It is not so much a problem if that gulf remains more or less constant. Adverse reactions are not uncommon is that gap expands. This is one reason why compensations are so secretive in most workplaces and why a lot of time around water-coolers is spent on salary speculation. Recently, the Indian Prime Minister, himself a humble economist, touched a raw nerve asking corporate India CEOs to cut down on conspicuous consumptions lest they stoke fires of social unrest. The media pounded on Dr. Singh for making this “blasphemous” appeal and not a single CEO stepped up to support the Prime Minister. The matter is one of high contention in the highest echelons of corporate existence. And – strangely - in the lowest echelons of corporate existence too.
There are some CEOs who have grown their business with higher social responsibility while ensuring wider income distribution. Mr. Narayana Murthy of Infosys gets top of mind recall – it is said the ladies who clean the Infosys campus are Rupee millionaires from grants of Infosys stock. Social equality is a matter that touches all aspects of life and retribution to an imbalance happens eventually albeit they take time to reach a tipping point. A one Nicolae Ceausescu will doubtlessly agree with this. So the question in front of corporate executives is whether to shroud compensations hoping the information distribution inefficiency will help curtailing unrest. This is akin to what the Chinese government is doing by clamping the spread of the greatest weapon of democracy – the public internet. Of course the other way out is for eminent leaders of the corporate world like Mr. Glocer to take a bold step in transparency and boldly go where no man has gone before.
