> If you're a C-level at a Fortune 50 company, some massive percentage of your personal assets, if they're invested in the stock market or private equity, are in commercial real estate.
> There's no mystery here. People with assets want those assets to remain valuable, and act directly to reinforce it. This is why we don't let athletes bet on their own games.
Wouldn't Leadership's financial incentive be stronger to increase the value of the company rather than "the whole commercial real estate market" that a single company only has a small effect on?
WeWork seems like an obvious exception - but Adam Newmann was self-dealing by renting his own real estate out to his own company. It was a hugely perverse incentive, and I suspect most boards aren't so captured by things like that.
> Wouldn't Leadership's financial incentive be stronger to increase the value of the company rather than "the whole commercial real estate market" that a single company only has a small effect on?
Yes, but those are not necessarily conflicting values. As you say, I wouldn't expect them to crash their companies, but... If it's approximately neutral or RTO has only a mild negative effect they may do it anyway, or they may be boneheads and do it despite a negative effect on the company itself because they do not believe in the negative effect.
Also it's very clear that our oligarchs are not always thinking clearly, based on Twitter's spectacular implosion. People do make mistakes, especially in domains that are hard to evaluate.
Wouldn't Leadership's financial incentive be stronger to increase the value of the company rather than "the whole commercial real estate market" that a single company only has a small effect on?
WeWork seems like an obvious exception - but Adam Newmann was self-dealing by renting his own real estate out to his own company. It was a hugely perverse incentive, and I suspect most boards aren't so captured by things like that.