Readers Report
Setting a New Standard for Sensitive Reporting
I applaud you for publishing the article on Forest Laboratories ("A CEO and his son," Cover Story, May 27). As a mental-health professional, I have found much resistance to treatment from so many well-meaning professionals. Solomon did the right things for his son. What could have ended in death ended in bringing a wonderful human being back to life.
I am sad that there was the loss of the wife/mother, but another loss did not happen thanks to a father's commitment to his family. Solomon then helped his company's employees by implementing an Employee Assistance Program and matching the medical insurance benefits to the mental-health insurance program. This can be costly. However, I believe the long-range bonus will win out. Employee productivity is the first thing that comes to mind.
I hope that companies will begin to see the benefit for themselves and for their communities of honoring their employees as whole human beings. Keep up the good work.
Mimi Coneff
Loma Linda, Calif.
"A CEO and his son" was both informative and insightful. This is what we have come to expect from BusinessWeek, but this story set a new standard by probing and reporting in such a sensitive and holistic manner. It is truly encouraging to find a mainstream business publication that is prepared to address the personal issues that we must all face as we do business.
Peter Bloch
Mar Vista, Calif.
I was very honored by Susan Berfield's kind and wise cover story about my father and me. I was dismayed, however, by the catalog of vital statistics given beside my photograph, which ends: "Family: Single."
I am gay (as the article indicates) and in a long-term relationship. If you are not able to find language suitable to the fact of a relationship legally proscribed from the word "marriage," then perhaps you should simply leave this particular tagline off your photos of gay figures.
Andrew Solomon
New York
The story about Forest Labs is great, but getting out the facts of the illness that is depression is even better.
Mary N. Wade
Franklin, Tenn.
Will the Real Earnings Numbers Please Stand Up
"Earnings: A cleaner look" (News: Analysis & Commentary, May 27) examines whether the new definition of operating earnings by Standard & Poor's is likely to be more useful to investors than the pro forma earnings numbers tabulated by Thomson Financial/First Call. A recent study I conducted with Kumar Sivakumar of Boston University suggests that if S&P's past attempt to define a similar measure, operating income (which it has included in its Compustat database since 1988), is indicative of the usefulness of its new definition of operating earnings, the answer is no.
We find that the earnings numbers tabulated by Thomson Financial I/B/E/S are more useful to investors than the S&P operating income numbers on three dimensions: They predict future earnings better, they are more highly associated with stock prices, and earnings surprises based on them are more highly associated with stock-price changes when companies announce their earnings. Of course, the past may not indicate the future.
Lawrence D. Brown
Professor of Accountancy
Georgia State University
Atlanta
S&P "core earnings" would shift the burden to company management to explain why the tighter calculations should not be used. Management knows the business best, and that is where the burden of explanation should fall. Rather than calculating thousands of core earnings each quarter, investors could scan a table of core, generally accepted accounting principles, and pro forma earnings, and then, if desired, click to read management (or analyst) explanations. Core earnings would empower investors.
Jim Reimers
Chatsworth, Calif.
I find it ironic that neither the Financial Accounting Standards Board nor the Securities & Exchange Commission has reacted favorably to Standard & Poor's initiative to bring consistency to the measurement of operating income. FASB exists to assure that information is useful to capital providers; the SEC exists to protect investors.
If neither of these regulators has what it takes to provide financial reporting leadership, they should at least be supportive of those who have the courage to step forward. This lack of involvement is indicative of a classic "trees/forest" deficiency. Their focus on detailed reporting issues (the trees) obscures their vision of the fair and consistent communication of company performance (the forest).
John P. McAllister, CPA
Professor of Accounting
Kennesaw State University
Kennesaw, Ga.
There is no easy way to provide fully reliable measures of corporate profits to investors and shareholders. While all efforts in that direction are both needed and welcome, there is also a need to track a few nonfinancial indexes associated with corporate intellectual capital and knowledge management.
In the Information Age, the value of intellectual capital--however difficult to quantify--well exceeds the worth of tangible assets. Corporations should start reporting indexes such as knowledge-employee turnover and profitable-customer retention as well as some gauge of the extent and effectiveness of investments in information technology. The difficulty of the task does not justify its avoidance.
Gustavo Estrada
Symrna, Ga.
The Complexities of Complexity Theory
Stephen Wolfram says the old science ended in 1984 when he was doing particle physics ("Simple science," Science & Technology, May 27). By coincidence, the Santa Fe Institute was incorporated that year. This respected facility dedicated to complexity studies was conceived before Wolfram's self-designated breakthrough. Wolfram has done brilliant work. Yet he certainly has done nothing to stand out ahead of many others on complexity theory.
Stanley P. Santire
Houston
Re scientist Stephen Wolfram's Rule 30: At last, an explanation of Catch-22.
Jim Robison
Guerneville, Calif.
Wolfram's eight Rule 30 templates are identical to the Pa Kua of the I Ching (Book of Changes), the first of the Confucian Classics. Invented during the early part of the Chou Dynasty (1150 B.C. to 221 B.C.), these eight trigrams are purported to explain the underlying patterns of the universe and how they evolve. Ironically, the trigrams were said to have been discovered by examining the patterns on a tortoise shell. Sound familiar? I look forward to reading Wolfram's book.
Frank Richards
Chevy Chase, Md.
I believe that there is an error in the diagram "Reinventing nature": The last line in Step 8 has squares darkened as follows: 2 dark, 1 light, 4 dark, 3 light, 5 dark. I believe it should be: 2 dark, 1 light, 4 dark, 2 light, 6 dark. That is, the 10th square from the left on the bottom row violates the seventh template in the eight-template series.
Pete Whitesell
Tallahassee, Fla.
Editor's note: Writer Whitesell is correct.
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