Thursday, July 21, 2005

Amateur economist of the day 

I almost should make this a daily event: Find the best blog post of the day that illustrates a point in economics, written by a non-economist. Fellow NARNie Chad the Elder would win more than one, and today's entry on pay for non-profits and Mike Hatch's pursuit of a lawsuit against director pay levels would be a winner.
In some respects, the need for a strong board with high caliber members is greater at non-profits than at regular businesses. There are no shareholders with a stake in the business to keep tabs on the board and bring pressure against it if results don't meet expectations as there are at for-profit companies. There is no stock price to use to gauge performance (however imperfect that measurement tool can be). It's in the best interests of non-profits like Medica (and their customers) to put together the best board they can. And that usually doesn't come cheap.
If you hear refrains of our discussion on Q-Comp and merit pay from yesterday, pat yourself on the back.