Briefing: Holding on to happiness in hard times

The Week
News & Opinion
Friday, December 5, 2008


Briefing: Holding on to happiness in hard times

With economists projecting a gloomy Christmas and an even gloomier 2009, new research offers clues into how a dispirited nation can hold on to some optimism. Is there a cure for the blues?

When did happiness become a subject for science?
Philosophers have been on the case for centuries. But in the past decade, a burgeoning field of study known as “positive psychology” has sought to redirect scientific attention from humanity’s psychological ills to its psychological successes. More than 200 colleges now offer courses in positive psychology, which seeks to maximize happiness both for individuals and for society at large. “The focus on pathology,” writes University of Pennsylvania psychologist Martin Seligman, “results in a model of the human being lacking the positive features which make life worth living.”

So what makes us happy?
The short answer, most experts agree, is our fellow humans. “We are basically social animals, and most of our enjoyment comes from other people,” says British social scientist Richard Layard. But it’s not that simple. Studies suggest that our socially derived happiness is also predicated on material well-being. In fact, poverty is a leading indicator of unhappiness both in people and in nations. Likewise, emotionally rewarding, well-compensated work is a key component of self-esteem. Little wonder, then, that massive economic dislocation—the kind that leads to widespread unemployment and poverty—is known as a “depression.”

How does money affect happiness?
There is no universal answer: A hedge fund manager and a Tibetan monk provide two very different models of satisfaction. But most experts agree that the correlation is direct—up to a point. Poor people become happier as they escape poverty, studies have shown, but once people are free from privation, the tie between money and happiness begins to fray. Wealth in America grew dramatically in the second half of the 20th century, but surveys found that Americans on average were no happier. One study found that the “happiness benefits” of money peaked at the modest income of $20,000. Middle-class and affluent people who seek more wealth are often stuck on what psychologists call a “hedonic treadmill”—a perpetual pursuit of material goods, which reduces the available time for personal relationships and yields minimal emotional rewards. The kick of owning a big house or a giant flat-screen television tends to be short-lived, as these possessions become the next, unexciting norm.

Then why do we pursue wealth?
In order to have a “positional” advantage over a rival, whether that be a brother-in-law, the loudmouth who lives across the street, or some imaginary “other.” Surveys have shown that most people would be happy making less money, but on one condition: that everyone else made even less. In fact, most people prefer that scenario to one in which their income rises but everyone else’s income rises more. In other words, it’s not how much we have that counts. It’s how much we have compared to how much the Joneses have. That could explain why people in more egalitarian societies generally report higher levels of satisfaction with their lives. Scandinavian countries with large social safety nets consistently score highest on the happiness scale.

Where does that leave us?
Even within a robust, sometimes shaky system of capitalism, psychologists believe that increased happiness is attainable. Distilled to its most basic level, positive psychology encourages people to strive for “mindfulness”—living in the moment, recognizing the beauty of nature, and appreciating the positive aspects of our lives. Research has also shown that happiness is enhanced by optimism; religious faith; acts of generosity and altruism such as community service; and work or hobbies that produce a frequent experience of “flow’’—a state of total engagement.

So happiness is in our control?
Not entirely. The word “happiness” shares an etymological root with “happenstance” (and “haphazard”), suggesting that fate determines our lot in life. In fact, research suggests that genes dictate perhaps half of an individual’s capacity for happiness, so biological factors beyond our control play a big role. Brain images reveal, for instance, that people with higher levels of activity in their left prefrontal cortex tend to be happier. In one study, brain images even enabled researchers to predict which babies were more likely to cry when their mothers left the room, based on the levels of prefrontal activity in the babies’ brains.

Can we be happier?
Within limits, it would seem. Researchers now postulate that each individual has a “set point” for happiness, which is essentially a default position. Deviations from that point tend to be short-lived, with the subject soon reverting to his or her norm no matter what life-altering change has occurred. Within a year of major life-altering experiences, writes Jonathan Haidt, author of The Happiness Hypothesis, “lottery winners and paraplegics have both, on average, returned most of the way to their baseline levels of happiness.” What does this mean for people encountering tough economic times? Chances are, experts say, that other than those who are truly devastated, most people will retain their basic outlook. The happy among us will find cause to stay upbeat. As for the unhappy souls—what’s one more downer?

Happiness as national policy
While technocrats the world over try to boost their nations’ Gross Domestic Product (GDP),the government of Bhutan is publicly dedicated to increasing GDH—Gross Domestic Happiness. The policy has four pillars: equitable and sustainable economic growth; environmental conservation; cultural preservation; and good government. But Bhutan is not the only nation focused on happiness as a matter of national policy. British Prime Minister Gordon Brown, encouraged by fellow Labor Party member and renowned happiness scholar Richard Layard, has shown interest in using happiness studies to advance “well being” in the U.K. Layard argues for teaching “happiness skills” in school and for curtailing advertising that targets children, in an attempt to stifle envy and greed. The nub of his approach, though, involves an aggressive program of income redistribution—since, he says, “an extra pound or dollar gives more happiness to poor people than to the rich.” Of course that leaves unaddressed the unhappiness caused when taxes are raised to make that possible.

http://www.theweek.com/article/index/91094/3/Briefing_Holding_on_to_happiness_in_hard_times

News & Opinion
Friday, December 5, 2008
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Briefing: Holding on to happiness in hard times

CII Sounds Off on Executive Pay

Directorship Boardroom Intelligence

November 26, 2008
CII Sounds Off on Executive Pay

The Council of Institutional Investors released a statement voicing their discontent with the “perverse incentives that rewarded executives for driving up business with cant regard for the soundness and long-term benefit of those transactions.”

CII also noted that it strongly opposes companies that are compensating for lower executive pay by adjusting undervalued stock options, granting more stock or lowering targets for performance-based compensation.

“Investors across the board have taken a huge financial hit,” said Joe Dear, chair of the Council of Institutional Investors and executive director of the Washington State Investment Board. “At a time when the retirement assets of millions of ordinary Americans are becoming ever more skeletal, boards should not be fattening the pay packets of executives.”

CII believes that executive compensation is a critical and visible aspect of a company’s governance and pay decisions are one of the most effective decision shareholders can have a voice in. As companies continue to be bailed out by the U.S. government, taxpayers also are included in the mix.

CII has endorsed a set of best practices for executive pay policies and disclosures:

Companies should provide full disclosure of the performance goals used to determine annual and long-term incentive compensation. Such disclosure helps market participants evaluate whether pay practices encourage or mitigate against excessive risk-taking.

Executives should own a meaningful amount of the company’s common stock. A significant portion of their pay should be equity-based and they should be required to hold it for a period beyond their tenure.

Companies should provide shareowners an annual, advisory vote on the compensation of senior executives. Such a vote would give boards fast, useful feedback about investors’ views of the company’s compensation practices. It might also deter against over-the-top pay plans at underperforming companies.

Executives who leave a company as a result of poor performance—whether they are terminated, resign under pressure or the board fails to renew their contract—should not be entitled to severance payments.

Companies should have clawback provisions for recapturing unearned bonus and incentive payments to senior executives.
Compensation advisors and firms retained by the board should be independent of the client company, its executives and directors.

Tags: cii (1) executive compensation (49) pay for performance (7) economic crisis (4) shareholders (109) (339)

Business Week

The World's Most Influential Headhunters
May 7, 2008, 2:39PM EST

Scouting Emerging Business Trends

The world's most influential headhunters share unparalleled insight into emerging business trends and corporate leadership challenges
by Joseph Daniel McCool

There are few people as well placed and well qualified to see emerging business trends unfold as the world's most influential executive recruiters.
Just consider the experience and perspective they gain from working with a variety of corporate clients to scope the competitive landscape, court exceptional management leaders, and shape succession plans that are both solid enough to ensure continuity but adaptable enough to compensate for challenges looming just over the horizon.

In the course of conducting research for my just-published book, Deciding Who Leads, I was reminded by a number of executive recruiters and corporate leaders that perceptions about the quality of management, future financial opportunity, and recent market momentum move the best management candidates to gravitate to the most compelling job opportunities.
Ready to Jump

Likewise, whenever a company begins to falter, the sharpest executives can read the tea leaves and usually begin to leverage their network to make their next career move before things start to get ugly. That often leads them to the executive recruiters and almost immediately to some pretty serious discussions about why they want to leave their current employer.

The cumulative effect of that one-on-one intelligence gathering about executive attitudes—either perceptions of a bright future or a looming organizational meltdown—gives executive recruiters unparalleled vision into emerging business trends and the best executive career opportunities.
Take that kind of information, multiply it by several hundred interviews with executive interviews in the course of a year, and you begin to realize that executive recruiters' attitudes are actually a leading indicator about the health of organizations, and, for that matter, the broader economy.

The caliber and performance of senior corporate management is almost always suggestive of an organization's current and future financial performance. So who better to judge the trajectory of an organization than these external leadership scouts? And who better to provide us with compelling statements about future business trends than those recruiters who help move top executives to where the best action is?

Sniffing the Breeze
The world's most influential headhunters have a particularly acute sense for the business trends that may already be shifting the strategy and management demands for their myriad corporate clients. What follows are just some of the perspectives they've shared about the single global business trend that will most influence corporate performance in the future.
Tierney Remick, global managing director of the consumer/retail market for Korn/Ferry International (KFY), says she has already witnessing a global shift in consumer influence that will reshape the economic landscape. She points to "the globalization of consumerism, specifically the growing impact of consumer and economic independence in larger developing countries that have historically followed trends as opposed to setting them. They will create new centers of influence that will need to be understood by business leaders to compete effectively on a global scale."
Marylin L. Prince, co-founder of New York asset-management specialist search firm PrinceGoldsmith, says sustainable business practices will have a tremendous impact on future corporate earnings and on the search for leadership talent for some time to come. "Industry leaders will need to embrace the moral and economic principles of sustainable business to remain competitive and build successful companies," Prince contends.

The free flow of human and intellectual capital made possible by Internet technology is the moving force that will alter the course of many businesses, says Anne Lim O'Brien, a managing director at Russell Reynolds Associates. The fluidity of those forces, she offers, "provides speed and access to talent where you want it, when you want it. New media/social networking trends feed this flow."

A Share of the Blame
Recognizing how lackluster or incompetent corporate management has hurt shareholders and led to scandal in recent years, Robert J. Brudno, managing director of Savoy Partners in Washington, offers his view of something that should influence future organizational performance.

That, he offers, is "greater professional and moral accountability from those who recruit, install, and maintain weak corporate leaders. In the case of most well-publicized meltdowns of companies, it is rare that insiders did not know that bad things were likely to occur." Certainly he's counting some misguided executive recruiters among them.
Furthermore, Brudno opines, "too many people pay no price for the damage they cause, and their enablers are rarely held to account. Fix that and watch performance soar."
One consensus view offered by many of the most influential executive recruiters revolves around the growing influence of China and India. "The ability to expand in new markets and the capacity to reposition your business in new lines of activity while your core business or expertise is either disappearing or becoming a commodity," says Marc Lamy, a Paris-based partner and managing director with Boyden, is going to shape future business performance in ways that are just beginning to be revealed.

That suggests that more business leaders, and, for that matter, more of the world's executive recruiters, are going to have to balance intense focus on the challenges directly in front of them with a broader, global view of business trends before their full impact is widely felt.
Joseph Daniel McCool is a writer, speaker and advisor on executive recruiting and corporate management succession best practices. He is the author of Deciding Who Leads: How Executive Recruiters Drive, Direct & Disrupt the Global Search for Leadership Talent, which has been recognized as "one of the 30 best business books of 2008" by Soundview Executive Book Summaries.

Authors claim feeling gratitude leads to happier life

The Post Tribune

Authors claim feeling gratitude leads to happier life(http://www.post-trib.com/news/1302147,thanksside.article)

November 27, 2008
By Mark Taylor Post-Tribune correspondent

The Pilgrims were right about something besides turkey.
While their fashion sense can be debated, they knew enough about human and divine nature to appreciate the salubrious effects of thankfulness, that the act of expressing and feeling gratitude feels good as much as it does good.

The Pilgrims established Thanksgiving as a holiday for the colony in 1621. It took another 168 years for George Washington to declare it a legal national holiday and Abe Lincoln to set aside the last Thursday in November as the date for Thanksgiving.
Two recent books confirm what millions have suspected and world religions and philosophers have promulgated for centuries: the importance of being grateful, of counting our blessings.
"The Psychology of Gratitude" and "Thanks: How The New Science of Gratitude Can Make You Happier," explore the mental and physical health benefits of being grateful on the well-being of thankful people.

While it sounds like more pop psychology, in the studies conducted by researchers at the University of California at Davis and University of Miami, among others, thankful people report higher levels of positive emotions and life satisfaction, stronger sense of empathy with others and deeper spirituality.

The studies find that while gratitude does not require religious faith, that faith "enhances the ability to be grateful." The authors also found that grateful people are less materialistic, more generous and less envious of others.

One author, Robert Emmons, editor-in-chief of the "Journal of Positive Psychology," wrote that gratitude is the "forgotten factor" in happiness research.
He discovered a link between the complex emotion and improved healing. Emmons describes gratefulness as "a knowing awareness that we are the recipients of goodness ...We cannot be grateful without being thoughtful," he wrote. "Gratitude requires contemplation and reflection."




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