In this article, corporate governance continues the discussion on the global income and wealth disparities whose economic gaps are widening phenomenally.

It will illustrate how if this trend is left unabated will result in enhancing the lives of a few members of the globe at the expense and extinction of many due to miserable situations of hunger, diseases, political instabilities.

In our last article, we discussed several economic patterns that permeate the society and manifested in further social inequalities.

In this article, we continue with the other threats ahead of the execution of budgetary implementation and not only in Botswana but also in other nations.

The question now is, how as a country we differentiate ourselves from the global pack? According to INSEAD Survey, the following statistics serve to accentuate the exponential growth of income and wealth disparities on a global basis as follows:

The richest 10percent of the global population earns 52percent of global income and possesses 76percent of the entire global wealth, while the poorest 50percent of the global population income is 8.5percent of the global income.

Having access to only 8.5 percent of the income of the globe, this poorest bracket of society only has the access to the wealth of only 2percent .

Therefore, it can only be deduced that the difference in income and wealth between a spectrum of these two extremes is the income accessed by the middle- class category of the social class.

While the consumers and discussants on the results of this survey were pondering and reflecting on these critical pieces of information, questions were asked on who is responsible for taking the remedial initiative to bring possible solutions to this social imperfection;

Fingers then pointed at the Chief Executive Officers ( CEO) of the large multinational corporations. According to 32 000 respondents surveyed in the 2023 Edelman Trust Barometer, 77percent expected the CEOs to take a stand in this situation. The question now is, is this suggestion fair?

Although the CEOs are faced with multiplicity of business complex decisions, they are the employees of those corporations’ doing businesses. Of course, looking at the CEOs from the two lenses: he/ she is an employee reporting to the Governing Body.

In addition, there is the CEO who plays two roles as the CEO and a Director. This CEO’s letter of appointment and its related contract spells out his conditions of service. At the same time, this nature of the CEO has a letter of appointment as an Executive Director of the corporation.

The CEO’s terms of reference ( TORs) are to create wealth for the shareholders, and he/ she is also responsible to the other wide variety of stakeholders. One of the terms and conditions of the CEO is to create wealth and in turn incentivised enhanced bonuses.

Many of the multinational corporations employ the CEOs holding the foregoing two roles of being the CEOs and a Directors.

Based on that, he/ she has the corporation to run; he/ she is accountable to the Board; he/ she is responsible for overseeing the recruitment of employees to the corporation and the maintenance of that relationship.

However, usually, in the recruitment of the executive staff members, the CEO works in close consultation with the Board. The CEO is the key liaison officer in the stakeholders’ governance.

There are other roles in which the CEO engages as the chief officer of the corporation. We believe the CEO plays multiple roles in the corporate world to the extent that if they do not perform ethically and effectively, the situation of the income and wealth disparities may compound.

We believe the 77percent respondents burdening the CEOs with additional responsibility of resolving the income and wealth disparities is based on the narrow belief that since the CEO oversees the employment of staff members directly and indirectly, he/ she is free to switch and swop the wages and salaries of the same.

Before moving further with the discussions, it would be fair to check the CEOs’ remunerations to assess if they might also be exacerbating the situation rather than bringing it close to its possible remedies. In 2021, the study of 300 top United States of America companies was released by the Institute for Policy Studies ( IPS) found the ratio of the average gap between the CEO and the median worker pay having jumped to 670: 1.

That meant that, if the average CEO received 670 US Dollars in compensation, for every 1 US Dollar was received by that lowest paid worker. That ratio was an upsurge from 604: 1 in 2020. In 2021, Peter Drucker, the most famous management thinker suggested as the most ideal CEO to the lowest paid employee ratio to be the maximum of 25: 1.

However, looking at the current escalation of figures, we are not sure how reasonable this ratio was.

• In the next article, we will start the discussion with top four highest CEOs paying companies. We extend our warm gratitude to our readership continual feedback.