Change is in the air in boardrooms around the globe, and while adopting similar changes, the U.S., Britain and Australia diverge when it comes to pay.
Two-plus years after the passage of The Sarbanes-Oxley Act, corporate scandals continue to garner front-page coverage. Unfortunately, such incidents are obscuring some real progress. Boardroom changes, designed to strengthen governance and performance, are altering the corporate landscape, not just in the U.S., but also in other countries with their share of scandals, including the United Kingdom and Australia.
Many of the governance adjustments are remarkably similar, but board and executive compensation still vary considerably by country. Perhaps that's not surprising, but U.S. pay continues to far outpace that of the U.K. and Australia, despite the rising personal liability and responsibilities in all three countries. Nonetheless, boards in each country find themselves increasingly pressed to justify compensation, not only for themselves but also for the executive team. How the U.K. and Australia are handling these challenges could offer important lessons for U.S. firms.
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