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The Power Of Corporate Boards


Readers Report

THE POWER OF CORPORATE BOARDS

As one who has consulted with boards and recruited directors for some of the country's largest corporations, I read with interest John Byrne's "The CEO and the board" (Cover Story, Sept. 15) which focused on governance policies and practices at H.J. Heinz Co. In helping companies build top-quality boards and revise their governance practices to avoid criticism, we have often used Campbell Soup as an example of a company whose governance practices merit emulation.

The chart in the article entitled "Does good governance pay?" presents the stark contrast between the practices of Campbell and Heinz, suggesting that the answer to the question is a resounding yes. It must be noted, however, that there are a great many factors that ultimately determine the performance of a company, and it is risky to draw big conclusions from small samples. We won't know if this is the tip of an iceberg until we look beneath the surface.

Charles H. King

Senior Partner, Board Services

Nordeman Grimm

New York

I had the privilege of serving on the Heinz board for seven years (1989-96) and working for Anthony J.F. O'Reilly for many more. The board was unique in its experience, wisdom, global perspective, and integrity. It operated in a totally open forum marked by debate and wise counsel. This is one of the primary reasons why Tony O'Reilly and Heinz have produced an extraordinary 22% annualized return to its shareholders for 20 years.

David W. Sculley

Managing Partner

Blackburn Group

PittsburghReturn to top

AFRAID OF POISONS? BE CAREFUL IN YOUR KITCHEN

You're right on the money when you say that food poisoning is a severe and growing problem ("Eating scared," News: Analysis & Commentary, Sept. 8). Your story, however, focuses on the producer level, entirely neglecting the consumer level--that is, your kitchen, my kitchen, and the restaurant kitchen.

Producers can do only so much--probably more than they are doing now--but final assurance of food safety relies on us to cook food thoroughly to kill E. coli in the beef, prevent cross-contamination from other foods, and refrigerate foods promptly to prevent microbial growth.

Yes, there are some things the consumer can't do--such as wash off the Cyclospora embedded in the nooks and crannies of the raspberries. Government eyes are supposed to be watchful on our behalf. But the consumer has to take some responsibility, too.

Marilyn Lee

School of Environmental Health

Ryerson Polytechnic University

TorontoReturn to top

MAKING SURE AID TO RUSSIA GOES WHERE IT SHOULD

"What happened to the coal miners' dollars" (International Business, Sept. 8) conveys well the difficulty of reforming Russia's coal industry, but it inaccurately presents the World Bank's role.

The bank's first coal loan has supported reforms in three key areas: (1) restructuring coal subsidies toward expenditures that will support structural change and address social problems--such as payment for closure of uneconomic mines, severance pay, retraining, job-creation programs, and emergency housing maintenance; (2) reducing inefficient subsidies for operating costs and investments; and (3) restructuring ownership toward a private-sector competitive industry.

The proceeds of our loan were made available to Russia's general budget and were not earmarked for specific expenditures in the coal sector. It is wrong to suggest that any funding from the loan has been lost.

This is not to suggest that we are unconcerned about the proper use of the government resources flowing to the coal sector. Although progress has been made, you are right to point out that weaknesses remain in the systems for ensuring that government funding for the coal industry reaches the intended destinations--a problem that is most acute for money channeled through RosUgol.

We are, therefore, currently discussing with the government new mechanisms that it could create to ensure that its budget resources are used for the intended purposes.

Michael Carter

World Bank

WashingtonReturn to top


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