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If Only the SEC Could Put the Perps Behind Bars


"Go ahead, make the SEC's day" sounds good (News: Analysis & Commentary, June 2). Of course, Congress has been an equal perpetrator. The problem is that $500 million (or whatever) taken from a company as a fine doesn't hurt the guilty parties. It hurts the creditors (or stockholders, if they have anything left). Barring an exec for life is of little consequence, as he can afford the vacation or start his own private business with his likely ill-gotten gains. Going after these gains would help, but those "smart enough" to have misappropriated company funds are also likely to have made recovery difficult.

The Securities & Exchange Commission doesn't have the ability to imprison people. It is no doubt working more closely now with those agencies that have such authority, but the results suggest that cooperation and urgency between agencies still falls short of what is needed. Our index should not be fines and penalties but recoveries from officers and directors; not the number barred from public companies but the number in prison.

William H. Elliot

Los Angeles Louis Lavelle's "A fighting chance for boardroom democracy" was right on the money (News: Analysis & Commentary, June 9). However, I would caution Mr. Lavelle that while a democratic society allows a business to thrive, it is a rarity to find a business that thrives as a complete democracy. On the flip side, as a board director of an S&P 500/NASDAQ-100 company (until June 17 -- I wasn't renominated this year), I can attest that Corporate America's boardroom nomination and election process is in as much need of reform as the rigged initial public offering market or the Wall Street investment house cartel's systemic misbehavior. If SEC Chairman William H. Donaldson is going to address the clubby environment of Corporate America's boardroom seriously, please feel free to give him my phone number. I have more than a few simple ideas on how to improve the process.

James J. Treacy

Glen Rock, N.J.

Editor's note: The writer is former president of TMP Worldwide (now Monster Worldwide (MWST) Inc.) and was on the Monster Worldwide board of directors.

While I am all for increasing corporate responsiveness to investors, introducing partisanship to the boardroom will not help investors or the public interest. Give us rules to ensure reasonable transparency and let us "vote" with our buy/sell decisions. If enough investors sell a stock, the price falls, and chief executives and directors will be replaced. It is the law of the marketplace -- one which cannot be manipulated for very long.

Hugh Scott

Cypress, Tex. I was president of Coach Inc. for three years -- until April, 1996 ("Teaching an old bag some new tricks," Special Report, June 9). During this period, company revenues more than doubled, to more than $550 million, and earnings more than tripled. The company enjoyed record performance in each of these years -- hardly the results of a tired brand or a tired business. Most of the foundation for the Coach of today was laid then: The vision for Coach as a $1 billion brand; the first brand extensions and licensing arrangements (Lexus and Coach, Coach watches, and Coach footwear); the first free-standing Coach stores in Asia (including Tokyo); and the sourcing offshore (in Asia and the Caribbean) of core products. This is all a matter of public record.

I am extremely proud of these results and the team that accomplished them, as I am also proud of the position and results Coach has attained today. It would be nice, however, if current management (and the press) could enjoy the success of today without having the need to rewrite the past.

Laurence Franklin

New York Your article on applying business principles to public schools has sidestepped the cardinal rule of both business and education: Beware of fads ("Can business save New York schools?" Social Issues, June 9). Teachers naturally become resistant to change when they have been the targets of a century's worth of fads from the imaginations of academics and other educational gurus. There can be no justification for a vengeful system that seeks to "tear apart" the organization and "create chaos." Other than an awareness of the blight at school headquarters, there is no evidence that these businessmen/reformers have a clue about what is really wrong with schooling.

If New York City Schools Chancellor Joel I. Klein blows this one, as he probably will, what will be the last desperation effort for business reform of education -- to put out the call to Bill Gates?

Stephen H. Kaiser

Cambridge, Mass. I read with interest "The volcano behind Aetna" -- about the new direction at Aetna Inc. (AET) under John W. Rowe (People, June 9). I think it would behoove an objective reporter to investigate Aetna's behavior in South Jersey -- its abandonment of the only hospital in Cape May County and its subsequent impact on patient care. Aetna's strong-arm tactics in negotiations and the removal of most of the doctors in Cape May County from its network have left its patients abandoned and forced to travel 30 minutes or more to receive specialty heath care.

Michael N. Boriss, D.O.

Cape May, N.J.

I read your article on Aetna and Jack Rowe and the good news for their stockholders that they've been able to double their stock price and "ratchet up more returns." I wish BusinessWeek would report on what happens to Aetna's insureds while they are making all this money for themselves and their stockholders. One night, I had crushing chest pains and my doctor told me to go immediately to an emergency room at a hospital at which Aetna contracts. Obviously in pain, I didn't interview the attending physician that night to find out if he, too, was Aetna-contracted. He wasn't, and I am now considerably out of pocket -- Aetna has paid only a minor portion of his fee.

Marianne Arieli

Los Angeles I'm a 12-year-old girl from California. When I read "The new gender gap" (Cover Story, May 26), I was very interested because all the seventh graders at my school just completed a science fair project. Well, my group's project just happens to be called: Who's Got the Brains? Boyz vs. Gurlz. We handed out a quiz to each seventh grader at our school. It had three different questions in a variety of subjects: math, social studies, sports, science, language arts, and entertainment. Our original hypothesis was that the stereotype that girls are better in subjects that require verbal and "social" skills, and boys are better in subjects that require physical and "thinking" skills, would prove to be true.

Well, our results showed that there wasn't a difference at all in the girls' or boys' average scores. That surprised us. We also found, based on this experiment, that boys do better in sports, math, and social studies, and girls will do better in entertainment, language arts, and science. Girls excelling in science? Boys performing well in social studies? Well, that made so much more sense after I read your article!

Sarah Alaoui

Burlingame, Calif.


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