Magazine

Brickbats And Kudos For Jeff Bezos


Amazon's detour into sharing infrastructure as a paid service is not surprising ("Jeff Bezos' risky bet," Cover Story, Nov. 13). Bezos is a high-energy creator, not a grind-it-out operations executive.

Amazon.com Inc. AMZN

may have some valuable assets and intellectual capital, but I doubt this is a good new business venture. There are still too many open issues for it to work, and it is not the time for such a costly diversion.

This might be a signal that it is time for Bezos to step aside, be the chairman, and bring in an experienced operations-oriented CEO. Amazon and its shareholders would benefit.

Ed Holden

Naples, Fla.

The carping of [Amazon] investors illustrates why anyone who goes public these days should have their head examined. Complaining about Amazon's heavy investing in technology for the sake of another percentage point in margin borders on criminal insanity. These people aren't investors, they're vultures. If they don't like the stock's price-earnings ratio, they should sell their shares.

Frank Fortin

Needham, Mass.

The benefits that Annette L. Nazareth ascribes to current Sarbanes-Oxley regulations are way off the mark ("Keeping SarbOx is crucial," Outside Shot, Nov. 13).

Nazareth suggests that minor tweaks and incrementalism will erase the negative effects SarbOx has had over the past four years. What's really needed is just the opposite: bold, decisive action to achieve the overarching goal of protecting shareholders' interests without causing massive and ongoing deterioration in shareholder value.

If SarbOx has been beneficial to corporations of all sizes, why is there so much furor focused on the disproportionate costs of Section 404 and the overzealous "one size fits all" approach? [Section 404 requires companies to test controls assuring accuracy of publicly reported financial information.] The reality is that Section 404 has caused a massive economic disruption. While it is true that direct costs have decreased somewhat, they have not dropped nearly as far as expected or desired. Most companies still have to cope with high indirect costs; audit fees are at an all-time high; and accounting firms are reporting record profits.

Not attributing the decrease in initial public offerings in the U.S. even partially to Section 404 is unrealistic. Other countries, including Britain and Canada, are implementing stronger internal control policies, but they are nowhere near as restrictive or costly.

The Securities & Exchange Commission and the Public Company Accounting Oversight Board will have an opportunity to fix an unprecedented series of wrong turns and put SarbOx regulation back on track when they release new management assessment guidance and auditing guidelines on Dec. 13.

If America's global competitiveness and position as the world's preeminent capital market is to be maintained, sweeping changes must be made to the current SarbOx regulatory regime.

Paul A. Sharman, ACMA

President and CEO

Institute of Management Accountants

Montvale, N.J.

A major problem with Sarbanes-Oxley is that there haven't been any criminal prosecutions in the four years since its enactment.

SarbOx promised the public that offenders could get jail sentences up to 20 years and fines up to $5 million. With more than 1,200 financial restatements in 2005, one would think that some executives would be prosecuted. Where are the U.S. attorneys and the sec Enforcement Div. when the investing public really needs them?

Carl Olson

Chairman

Fund for Stockowners Rights

Woodland Hills, Calif.

Too much dependence on any one technology or source is not prudent planning ("Coal: Could be the end of the line," Environment, Nov. 13).

While biofuels such as ethanol and cellulosic ethanol and renewables such as wind or solar power are part of the solution, you cannot ignore the U.S.'s 200-year coal supply. Close to 50% of this country's electricity is produced from coal. We could be on our way to energy independence if we could figure out environmentally friendly ways to harness our core natural advantages--an abundant coal supply and the opportunity to extract oil from unconventional resources, such as tar sands.

Clean coal technologies are worthy of investment. Renewables are good ways to achieve some portfolio diversification. However, we cannot currently store the electricity produced from sun or wind to use at other times on a large scale. This is why most renewable resources do not work without a backup power supply.

Renewables also lack the ability to be turned on or off or to adjust to rising and falling energy needs in the same way a coal plant can. We should give credit to coal where credit is due.

Chuck Chakravarthy

Partner, Energy Strategy Practice

Accenture

Fremont, Calif.

Before universities invest heavily in updating their biotech curriculums to satisfy the demands of industry recruiters ("Biotech's beef," Science & Technology, Nov. 6), administrators should insist on continued long-term job guarantees for its graduates, including the payoff of costly student loans.

In the late '80s and early '90s, educational institutions invested in expensive upgrades of their information technology departments and programs. Just as these updated programs began producing graduates, the rug was pulled out from under students by uncontrolled outsourcing and granting of H-1B and L-1 visas. As a result, enrollment in information technology programs has declined by about 20%.

It's time for Microsoft Corp. to stop bellyaching about the insufficient number of information technology graduates and acknowledge the damage that visas and offshore outsourcing are doing to our institutions of higher education.

Louis A. Carliner

Masaryktown, Fla.

The Welches made an important point ("Send the jerks packing," The Welch Way, Nov. 13): No one wants to work with a person who is out of step with company values. These people are extraordinarily damaging. However, labeling them jerks eschews the value of talent development. Firing inappropriate workers when they are top producers is not smart, and it may even be counterproductive.

The cycle of firing, hiring, orientation, and training as a policy is risky and expensive. New hires are the devils we don't know. Difficult yet valuable managers can often be brought along with less expense and with significant return on investment. Professional coaching designed to focus on the developmental tasks of executive growth, with a commitment to align with corporate values, has been shown to produce effective, lasting change. Humanizing the workplace through coaching is consistent with a growing American workforce.

Rabbi Richard A. Davis

New York

"Who's afraid of Charlie Rangel?" (News & Insights, Nov. 13) again raises the prospect of an immigration deal now that the Democrats control Congress.

As a conservative, I support a guest worker program, and I believe the reason we have so many illegal immigrants in the U.S. is because they cannot risk leaving for fear of not being able to return for work. I believe that if these workers were allowed to travel freely with a guest worker card, many would return home. I've not yet heard a reason why we should provide them with a path to citizenship.

I think President Bush would have a better chance of success if he took the citizenship offer off the table and focused strictly on a guest worker program. Business needs labor, but it doesn't care whether that labor has U.S. citizenship.

Eric Dalton

Little Rock


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