Recent business news and chatter has revolved around the publisher Pearson, that two-thirds of its shareholders voted to reject the company’s remuneration report.

While the vote compels the company to absolutely nothing, it has grabbed wide attention because it follows reports that the company’s CEO, John Fallon, received a 20 per cent pay increase in 2016, while his company produced record losses.

The firm’s share price has struggled in recent months, while heavy cost-cutting measures have already been planned.

This, of course, might appear to run counter to a basic logic that reward should follow good performance and draws into a broader focus the massive disparities that can exist between the perceptions of different interest groups over what amounts to “good value” in an organisation.

Some will argue that pay rises at a difficult moment are hardly reflective of valuable performance, while others may well counter that it represents reward for managing a challenging situation in the best way possible. It might be seen as an enticement to continue a course of action, or as a misdirected use of scarce resources.

Ultimately this particular question of value for money is one that can only be answered by that company’s various stakeholders. However, it did also prompt me to think about another measure of value through which leaders are always judged — that of their employees’ view on the value of their leadership.

While this is a good deal less attention-grabbing than an enticing story about executive pay, it is arguably far more telling in the actual day-to-day performance of a business.

A leader who is viewed positively by his followers — a leader, in effect, who is seen as having intrinsic value to a company — will be able to achieve far more than one whose followers have lost (or, indeed, never had) belief in their leadership approach. They will have staff who are more committed to the organisation’s vision, more dedicated to their particular tasks, and more willing to push harder to ensure the business’ success.

This is important because, while a leader naturally will take ultimate responsibility for the highs and lows of organisational performance, they may well be faced with circumstances beyond their immediate control. They might be confronted by an extremely depressed market, or a technological advance they couldn’t have foreseen.

Conditions might change so that they are required to meet the challenge of new competitors, or to deal with a critical skills shortage in an essential business function. At such times, a leader who has retained their followers’ belief in the value of their leadership will be able to ride out a moment of difficulty more assuredly.

Indeed, where followers truly value their leader, challenging times can still be negotiated confidently — even productively. It is easy to think of examples of major, high-performing companies whose leaders have made decisions that hindsight has shown to be a less than perfect move. a

Think, for instance, of the seemingly-doomed Google Glass, and you will likely conclude that while the product itself was hardly a success, it has also barely dented Google’s overall market position. Rather than being seen as a waste of time and resources, I’m willing to guess that most Google employees probably view it as a positive example of their leadership’s vision and drive for the company as a whole.

It represents innovation and ambition, rather than a dead-end.

Such a mindset is particularly important when you are talking about a leader and business faced with difficult times ahead — where job losses, reduced budgets or divestments might await. A leader who has — through a compelling vision, a commitment to communication and consistency, and dedication to good leadership — retained their value in the eyes of their followers, will be most likely to pilot the organisation through difficult seas.

As a result, it is arguably this measure of value, rather than that springing from a compensation committee, that better illustrates a leader’s true worth.

— The writer is CEO of Knowledge Group.