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Submitted by Lydia Ochieng-Obbo on
Although there is a strong correlation between Executive Pay and the Financial Crisis the short-termism and excessive risk taking is also rooted in high stakeholder expectations which puts unrealistic pressure on management mainly due to run away competition ( you can read it as excessive ostentetiousness, greed ) I would also like to point out that there was excessive laxity on the part of the regulatory framework in all spheres of the financial system. While we in Africa were being told to regulate and regulate our colleagues in the developed world were taking free market economics to another level. De regulation became the order of the day. So with unreasonable expectations from the shareholders pushed by the increased consumerism and living larger that life ( earning a lot for doing very little) that most elites have adopted, a lax regulatory and supervisory framework, who is surprised that the Executives took advantage deliberately or not - took unprecedented risks to satisfy their greed and that of their employers.