Captains Rewards Outweighed by Risks

Lloyds List – Monday 23 June 2008

IT’S THE way of the world. You are a captain of industry, richly rewarded with a vast package of shares and a mind-boggling salary, accompanied by colossal annual bonuses and other financial accoutrements which your board of directors has been persuaded is necessary to prevent the ‘world-class’ manager you are going off and accepting something equally juicy.

Well, in this risk taking world of corporate excitement, you are forced to go against your better judgement and take a risk.

It turns out that you have made a colossal cock-up, which costs the company millions in terms of reputation and share value.

So you are forced to depart, but fortunately with a massive financial cushion of cash and unimpaired pension rights, while your current enormous bonus is available to gild the lily and ice the cake. It’s a hard old life.

You are the captain of a ro-ro ferry, coming into a tight port with difficult wind conditions. In your risk taking world of operational excitement risks are what you are paid to take, but on this occasion you miscalculate the strength of the wind and you make what is called in the profession a “hard landing”, holing the ship and damaging the ramp.

The company is generous enough not to fire you, but busts you back to second mate after a suspension while the accident is investigated, your salary plummeting from $86,000 per annum to $63,000.

I suppose you might consider yourself lucky not to be prosecuted for criminal damage, or worse, if one of your passengers had tumbled down the stairs It’s a hard old life.

Increasingly, the world is being divided into those who we believe to be risk takers, but are tremendously insulated against the consequences of any risk, and those who, because of their profession, take real risks every day of the week, and are punished severely if they ever make a mistake.

And one of the problems is that among the former category, and indeed among those who really do not take any risks whatever, there are those calling for higher penalties and more rigorous prosecution under criminal law of those in the latter category, whose jobs entail the risk of a mistake or a miscalculation.

Curiously, the sort of financial insulation enjoyed by captains of industry does not appear to be available for captains of ships. It’s a hard old life.

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