Magazine

Coping With The Shrinking CEO


The many new directors coming on board in the wake of Sarbanes-Oxley -- including those who are chief executives -- need time to develop a good grasp of the business dynamics facing corporations they oversee ("The boss on the sidelines," Cover Story, Apr. 25). Having so many new directors exacerbates the disadvantages of boards micromanaging CEOs who, as you point out, have a deeper understanding of their business and are in a better position to make critical strategic decisions. Thus, even if CEOs are willing to make appropriate decisions that are smarter and bolder than what the new environment encourages, strategy development may suffer as senior management's time and priorities are diverted toward compliance.

Phyllis Ezop

La Grange Park, Ill.

The risk for shrinking CEOs is that they may settle into merely coordinating the compromises among various stakeholders. After all, auditors, lawyers, employees, even Wall Street are special interest groups with their own perspectives on what's most important. The new opportunity for the CEO is to ensure all parties sit at the table together, recognize the validity of diverse interests, and drive toward an innovative, shared agenda.

Boards, too, have the opportunity to redefine their relationship with the CEO -- not just as someone over whom they have power, but as their partner for shaping a greater future for the firm.

Marc Sokol

David B. Peterson

Personnel Decisions International Corp.

Minneapolis

If the day of the imperial CEO is over, why are these people still being paid as if they are imperial?

Grace Todd

Idaho Springs, Colo.

The authors of "iPod killers?" (Special Report, Apr. 25) missed an important part of the story. There is a set of technology standards from a body called the Open Mobile Alliance (OMA) that covers download and security for online content services, such as music stores. For over a year several wireless carriers, mostly in Europe, have been using the OMA standards as the basis for mobile content services, many of which involve downloads of music over the air directly to handsets for playback. T-Mobile, Vodafone Group (VOD), and O2 are some of the carriers doing this. OMA-compliant services are available from multiple carriers and can deliver content to any OMA-compliant device, which most of the major handset makers are offering, starting roughly in the $100 price range.

Bill Rosenblatt

New York

I was disappointed not to find the palmOne Inc. (PLMO) Treo 600 or 650 among your list of iPod's Phone Rivals. The Treo has been widely recognized as the best hybrid phone-organizer. Coupled with a memory card and cheap MP3 player software, it makes a very strong competitor to the iPod or any of the phones previewed in your article. With SD memory card prices dropping almost every month, it will soon be able to equal at least the iPod mini's storage capacity as well.

Armughan Javaid

Bristow, Va.

As long as state insurance regulators permit insurers ("Watchdogs with eyes wide shut," News Analysis & Commentary, Apr. 25) to engage in related party transactions that result in "double counting" of assets through surplus notes and the heavy front-loading of generally accepted accounting principles profits on high-commission products such as annuities, we will see other insurers with financial "surprises" similar to American International Group Inc. (AIG) There could easily be a tipping point soon where there will be too few soft landing spots (acquiring companies) for too many troubled insurers. This unfortunate occurrence will reveal the inherent inadequacy of the consumer protections offered through state insurance guarantee associations.

David M. Sanderford

Granbury, Tex.

In "Due process -- even for bigwigs" (Editorials, Apr. 25), you quote statements by New York Attorney General Eliot Spitzer about certain AIG transactions and then go on to malign him for violating the innocent-until-proven-guilty rule, among other things. However, your quotation is only an excerpt. In full, Spitzer said: "The evidence is overwhelming that these were transactions created for the purpose of deceiving the market. We call that fraud...." He is characterizing a certain type of transaction as fraudulent, not definitively concluding that AIG committed illegal fraud.

Jeremy Meilman

Philadelphia

The article "How Ampex squeezes out cash" (Information Technology, Apr. 18) could suggest that Eastman Kodak Co. (EK) -- which Ampex Corp. (AEXCA) has filed complaints against with the U.S. International Trade Commission and in the U.S. District Court of Delaware -- should somehow be entitled to profit from an Ampex creation without paying for it. In particular, the article quotes a defense attorney claiming "[t]here's no socially useful purpose [for patents]" and refers to soaring lawsuits involving "patent trolls." A "patent troll" is a company that purchases a patent, typically from a bankrupt firm, and then sues another company, claiming infringement. Ampex has done no such thing. Ampex, an American company with innovations spanning decades -- and the place where Oracle Corp.'s (ORCL) Lawrence J. Ellison as well as Ray Dolby began their careers -- continues to create valuable technology.

It is ironic that Kodak has chosen to engage in expensive defense litigation rather than pay Ampex for its intellectual property. The fact that such leading manufacturers and marketers as Sony (SNE), Canon (CAJ), Olympus (OCPNF), Matsushita Electric Industrial (MC) (Panasonic and other brands), Pentax, Victor Company of Japan (JVC brand), and Sanyo Electric (SANNY) have recognized Ampex' innovations says much about the validity of Ampex' property and the appropriateness of its legal strategy.

James Feldman

San Diego


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