I've been in the board room when discussing salaries and told that we need to offer the lowest that the candidate will accept - "it's just good business".

I was arguing against that mentality as responsibilities and retention are a more important metric to my mind when thinking about compensation. But even there, I'm part of the problem as I would set my "retention" target to some measure above industry standard: where-by I am still thinking in industry standard terms. (as per this thread)