October Tip Sheet: Business, Law & Economics

Tip sheets highlight timely news and events at Washington University in St. Louis. For more information on any of the stories below or for assistance in arranging interviews, please see the contact information listed with each story.

‘Do Not Call’ List
Congress cannot overrule court victories for telemarketers; a ‘tragedy’ for consumers

Troubling new evidence on corporate governance and CEO pay.

In 1980, the average CEO was paid around 40 times as much as the average worker, but the multiple is now above 400 for the largest U.S. companies. With such increases in top executive pay, including New York Stock Exchange Chairman Richard Grasso’s $139.5 million retirement-pay package, an expert on executive compensation says that corporate governance practices should come under even greater scrutiny. Todd Milbourn, Ph.D., a professor of finance at the Olin School of Business at Washington University in St. Louis, has recently documented other troubling evidence with regard to the efficacy of corporate governance and CEO pay.

The efficient company
Outsourcing helps firms share risks, but may create new ones



The concept of hiring another company to handle “non-core” functions has been around since companies began. But it’s only been in the last several decades that the term “outsourcing” has been coined. Selecting which functions to be outsourced is as individual as each company and the goods and services it provides. Panos Kouvelis, a professor of operations and manufacturing management at the Olin School of Business at Washington University, says that it is often argued that outsourcing helps share risks with suppliers, but new risks enter the picture. “Often difficult tasks, if not appropriately managed, can get out of control,” Kouvelis says. “However, these are the tasks in which a firm can build competency and appropriate market value.” Kouvelis explains the pros and cons of outsourcing.

Investing in democracy
A nation’s potential for economic investment, growth hinges on five key factors, study finds


Joe Angeles/WUSTL Photo


Globalization is creating divisive tensions between developed and developing nations. Many fear globalization, blaming it for their societal ills. Yet, globalization has produced opportunity and improvements in social welfare for those nations able to take advantage of its benefits. Nations who fail to take full advantage of globalization may have only themselves to blame, according to a study in a forthcoming issue of the Journal of International Management.

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