Changing Attitudes Towards Corporate Governance - These All Tie Back To The Corporate Culture!!

This is a good article which I adapted from SC Magazine.

Patrick Jolly did a very good research report about the Corporate Governance & the 3 S's namely, Scandal, Security & Strategy. The boardroom has become a much more accountable place; transparency and meritocracy are the order of the day.His conclusions is that the Corporate Governance Require of Changing Atitude & it must be in build with the Strategy of the Business as the whole.

Now let me Sum-up on the Corporate Culture with 4 main Criterions:-

1. Corporate Governance - Management Style & Control; Audits & Refinements

2. Leadership Quality & Renewal

3. People includes their Ethics; Conducts; Mindset-Attitude

4. Re-Action to Change Timely



There are 2 type of people elements here. That is the Management Leadership & the floor level people. Looking into the issue of IBM turn arround Lou Gestner take almost 3 years to get IBM to clean up & implement his so call New Strategies.

Now looking at Michael Dell, in view of the Internet age & the PC Technology shift, if Dell have not realised that he need to change the Strategies & Tactics in Business , Dell could have suffer the same faith like any other PC corporation. Michael Dell have tap the expertist of external executive to turn the business arround. The Just in Time manufacturing which they learn a lesson from the Japanese Toyota. Looking at any PC company today, they no longer be the Original Product Manufacturer.

In fact, today; they are all system integrator. Be it Dell, Sony, HP...etc. Even at the software business, IBM is still the larges Software corporation in the world interm of revenue. IBM no longer produce every single code within their corporation. like those year's. IBM have utilized the services of their ex-employee's as well as 3rd parties.

On the subject of Leadership Quality. At the present time, it more a Celebrity & Money Position, it is totally a wrong concept after all, the excutive search firm's shall shoulder some of the failure responsibily in recommending the canditdate to be on the position of Top Executive Post such as Chairman, President & CEO. The quality of a leader cannot be overlook at all time, In the dynamic change & rapid chnage environment, How could a leadship to be identified & be a situation leader take lead of the change??

As mentioned in my earlier article, a corporation is just like a living human entity.. it have the 4 Noble Truth of existence that is

Birth

Growth

Decay

Death


Therefore, be it the level of leadership or the floor employee, none can escape the truth of the above. So the only way out is the self renewal & self improvement. As the Gotama Buddha ( Means the Perfect One; The Enlighten One) & Confucius said the same thing:

Everyday I Recollect Myself 5 Times.

All in All talking about

Strategies, Tacties,

Risks & Opportunities

Ethics, Conducts

Mindset- Attitude

All these are just a technical term, without the "People", the Rank's & File's all these are just an illusions.

As the Old saying the citizen are the Heaven of the Ruling Emperor. His fellow citizen then have Food as their Heaven. With the current high Bait system, there is no fairness in the reward & compensation. That is the main cause of dis-array. Looking at Kingston Memory as an example, Kingston Senior management have maintence a reasonable acceptance gap between the top mangement & the their employees, the performance bonus award the return to employees in the more fair level to all in term of their compensation.

As Sun Tze said, "An Emperor Make The Mistake, He Shall Receive the Same Punishment With His Fellow People"!! Which Carly Florina have made the mistake by firing her 2 field Generals, before the board moving in to evade her. As a commander in Chief, if she would have adopt the Sun Tze philosophy, even though she may not be in cordial relationship with her board, I am sure she would leave a very good memory behind for her people after all.

In my paper on Creating An Excellence Philips Corporate Culture in 1989-1990, Although I have gone after Philips disbanded my operations. However, my paper the details of the spirits & soul are still living. These can be realized from its recent renewal of their New Corporate Culture Sologan.

Finally is the Reaction to Change & Change Timely for the Longevity of the Corporation.

Changing attitudes towards corporate Governance
by Patrick Jolly

Scandal, security and strategy. These 3 S's are reshaping the corporate governance landscape today.

One only has to mention the name Enron to describe the first. The seriousness of the issue is indicated by the extent to which government has acted to prevent such scandals occurring in the future. Apart from the reform of existing company laws, the UK, for example, initiated the Higgs review of the role of non-executive directors. And the US has gone further than most, no doubt since the Enron scandal took place on its doorstep: Sarbanes-Oxley is the toughest regulatory intervention since the 1930s.

The boardroom has become a much more accountable place; transparency and meritocracy are the order of the day. Newly introduced principles and guidelines are encouraging directors to take direct responsibility for corporate data. Auditors are being empowered and their independence reinforced.

When it comes to Information Security, a series of increasingly alarming online threats have moved the issue from being the preserve of the IT department alone right up to the level of the board. Viruses, spam, spyware, phishing and hacks constitute a massive group of 'inbound' concerns, all of which have the potential to impact negatively on the bottom line.

Remote internet access and the proliferation of wireless devices are changing the way we look at Information Security. Allied to this is the question of outbound threats. Research from different sources shows that around 80 percent of outbound breaches, or confidential data loss, originates within the organization and are carried out by an employee. They may be malign but are more commonly a result of human error – hitting the 'send' button on an email by mistake, for example. A recent survey ranked confidential information leakage as the major content issue facing corporations, after spam.

All in all, the Department of Trade and Industry's 2004 Information Security Breaches Survey puts the price of these threats at several billion pounds: the average cost of an incident is £120,000, though the risk is also that a single event might have calamitous consequences. Hence the reason that security is a concern that the board must address. It is a question of governance because maintaining control of security has a direct bearing upon shareholder confidence, brand value and the bottom line.

Many companies have adopted a head-in-the-sand approach, treating network traffic as a 'no go' area for fear of what might be revealed, but this is no longer a viable option and is likely to offer no defence in a court of law. In fact making a conscious decision to 'do nothing' to protect company resources, including employees, is a very dangerous strategy in the current climate.

Security needs to be thought of as an operational risk. The first step towards successful security management is identifying the risk and then controlling and mitigating it. Technology plays a key part in this process but senior management must be in charge of the process; governance is required to provide and implement the business-wide view.

And hence, thirdly, governance is a matter of business strategy. The threats are not trivial. Governance must be built into the overall strategic framework of the business since an error of governance might even lead to the failure of the business. Moreover, the regulatory responses to Enron and the like are aimed at nothing less than a change of culture.

A prime example of the links between strategy and security is the attitude that businesses display towards mobile working. The practice has become increasingly popular over recent years because of the greater degree of flexibility that it offers to the extent that many organizations now advocate mobile working to a significant proportion of their workforce. However, businesses that encourage the practice are not doing enough to protect themselves against the additional threats that mobile working can present.

Worryingly, my company's own research recently found that 60 percent of UK businesses have no plans to implement content filtering for mobile workers. Of greater concern still is the fact that only 20 percent consider the risk sufficiently important to warrant the immediate implementation of content filtering when introducing the practice to the organization. However, security is the backbone of governance and, as such, evolving operational issues like the adoption of mobile working must be incorporated into strategies in a timely manner.

Even where organizations have made the link between security and governance, in many cases it is through a feeling of pressure. In order to adopt and run an effective approach, businesses can adopt an ongoing, three-tiered approach to security based around the principles of policies, education and technology.

Policy - Clearly outline what the company resources can and cannot be used for. Update the existing Acceptable Usage Policy (AUP) to ensure that operational changes, such as mobile working, are covered as they become relevant to the business.

Education - train employees to understand the potential threats posed to both themselves and the wider organization. Clarify the appropriate behaviour that can be used to avoid such instances from occurring and how to deal with them when they do.

Technology - ensure that the appropriate technology is used to enforce the terms and conditions of the AUP and act as a safety net against policy breaches.

In isolation, none of the above measures alone are enough to solve the problem but by integrating them together any organization will ensure that risk is mitigated to the greatest possible extent.

Corporate governance is no longer to be thought of as an extra – a hurdle to leap at the end of the financial year (or when the inspector calls). Good corporate governance needs to become an ingrained process, supported by both policies and Information Security. In order not to just pay lip service, it's advised to consider governance and compliance issues in line with the refinement of frameworks and in terms of the implementation of best practice, of which policy development, educational programmes and technology implementation are all key components. In short, governance requires a change of attitude and must be built into the strategy of the business as a whole.

SurfControl are exhibiting at Infosecurity Europe 2005 which is Europe's number one information Security Event. Now in its 10th anniversary year, Infosecurity Europe continues to provide an unrivalled education programme, new products & services, over 250 exhibitors and 10,000 visitors from every segment of the industry. Held on the 26th – 28th April 2005 in the Grand Hall, Olympia, this is a must attend event for all IT professionals involved in Information Security. www.infosec.co.uk

The author is President EMEA & APAC, SurfControl

SC Magazine

Wal-Mart Director Is Ousted After Probe - To Re-Look It Culture!!

The integrity of Leadership shall be maintence at all times.

It the Code of Ethic & Conducts & Corporate Culture cannot be exhibit & keep up by it's leader's. Then certainly, you don't expect the employees in the corporation to follow.

The recent Walmart incidents of unfair treatments to its employee & the recent case of fake Invoices & Expenses case, Walmart would need to look at the corporation more closely.

As the corporation grow big & aging. If the Leadership quality, Ethics, Business Conducts cannot be up keep, then there is a need for Walmart to relook at its Corporate Culture & re-examine the Ethics & Conducts of Leader's & the management. Then follow by getting the employees to understand & re implement the Walmart Way in Corporationwide. Otherwise, Death is certain.

Wal-Mart Director Is Ousted After Probe
The Sam's Club ex-chief is asked to quit the board after a company inquiry reported evidence of fake invoices and expense accounts.
By Roger Vincent and Kathy M. Kristof
Times Staff Writers

March 26, 2005

Reflecting stricter ethics in corporate America, Wal-Mart Stores Inc. booted its former vice chairman from its board Friday after an internal probe allegedly revealed padded expense reports, fake invoices and unauthorized use of gift cards.

Thomas M. Coughlin, who retired as an executive of the world's largest retailer in January, was asked to resign his post as a director. Three other Wal-Mart employees, including a company executive, were fired. The company said in a regulatory filing that the amounts in question could total $500,000.

It was unclear Friday whether Coughlin, the former chief of Wal-Mart's Sam's Club warehouse stores, was alleged to have personally been involved in the transactions or whether they simply had occurred on his watch.

The Bentonville, Ark.-based company said it reported the results of its investigation to federal officials. A Wal-Mart representative declined to provide further details. Coughlin could not be reached Friday. An assistant to Robert Balfe, U.S. attorney for the Western District of Arkansas, declined to comment.

Wal-Mart's move is consistent with federal guidelines that were revised in November in response to the Sarbanes-Oxley law, said attorney Keith Bishop, a former California corporations commissioner and a partner at Buchalter, Nemer, Fields & Younger in Irvine. The new guidelines impose stricter standards on corporate ethics.

"The days of 'hear no evil, speak no evil' are over," Bishop said. "You cannot really stick your head in the sand when you hear that there is misconduct by people in your organization."

Nell Minow, editor of the corporate governance website Corporate Library, said it was important for the board to send a signal to employees, suppliers and customers about potential misconduct. Wal-Mart has long had strict codes of conduct and boasts a bare-bones corporate culture in which executives stay in budget motels and employees are forbidden to accept even token gifts from vendors.

"In case there was any doubt, this makes it clear that we are living in an era of zero tolerance of ethical violations," she said.

Coughlin said in his resignation letter: "I leave with warm feelings for the company and all the people who have made it great. I have appreciated the opportunity to serve."

The 55-year-old Coughlin, who spent decades with Wal-Mart, was once considered a candidate to head the company. He started in 1978 in the security division and eventually oversaw the U.S. Wal-Mart stores, Sam's Club warehouse stores and Walmart.com.

He joined the board in April 2003 and had been a member of the board's executive, strategic planning and finance and stock option committees. He had been expected to step down in June.

Coughlin also serves as lead director on the board of ChoicePoint Inc., the Atlanta-based information broker under fire for security breaches that exposed as many as 145,000 personal data files to identity theft rings.

Los Angeles Times: Wal-Mart Director Is Ousted After Probe

Feedster Claims

No Need to Click Here - I'm just claiming my feed at Feedster

LG Group Re-Engineers Management Approach -- It Have to Be On a Close Loop Servo Monitoring!!

LG Group certainly have the wisdom for becomming the Top Global Corporation. By lunching it Re-Engineering of Management.

As Mentioned, LG Group yesterday declared the adoption of a
new management road map that stresses fair play, innovation and thorough brand management.


I would rather not to call it the Re-Engineering Approach.


When I join IBM, I am given a Green Book "The IBM Way", That have iven me the 1st cultural inguence of Multi-National & the No 1 Computer Giant then. However, after years IBm have gone into trouble themself of not getting the corporation into one act. That nearly got them under in 1994.

In 1989, my paper on "Creating Excellence Philips Corporate Culture", I have based on the situations & my observations on the Philips as the whole. Which I spell out that the Philips Excellence Corporate Culture Must be built on the below:

Unity

Respecting of Individual

Regardless of Race, Country of Origin

Harmony

Justise

Equality

Excellence In Everything

Then on the Operating & Daily priority of:-

Creativity & Innovations


The strong emphasis of "Human Factors" couple with the Close loop Servo Control & Management system. Only everyone put the act in synchronization, capitalized on strenght of Synergy of all, then together; the Excellence Corporate Culture can be achieved.

However, while the paper is adopted & a 3rd party consultant company is appointed to implement the so call "Operation Centurion", But I am removed.

These taught me a serious lesson about so call the Corporation politics. It also change my career life for the last 16 years.

A big Corporation is just like a single human body, if the cacer cell is not heal as soon, then there is no way that the deadly disease is not going to spread & bring the corporation life to an end. hence, the monittoring & control of corporate culture is not just by lunching the initiative. Without a constant refinement then the process of

Birth

Growth

Decay

Death


Is Certain!! The Law of Birth & Death is always co-exist in any life form.

LG Group re-engineers management approach

LG Group yesterday declared the adoption of a new management road map that stresses fair play, innovation and thorough brand management.

The major conglomerate said it expects the "LG Way" to advance the realization of its goal to become a global top brand.

LG has a long-term vision of cultivating the LG name as one of the top three global brands in the group's core sectors of electronics, information technology and chemicals. Yesterday marked the 10th anniversary of the LG brand. The business group had originally sold products under the GoldStar label.

The conglomerate also hopes that the "LG Way" will establish a strong corporate culture unifying its employees.

LG Group Chairman Koo Bon-moo yesterday declares the "LG Way," a new group-wide management principle. [The Korea Herald]
LG recently completed the separation of its operations between the two founding families to end a 57-year-old alliance. The group is now set to rebuild itself as a global electronics and chemicals leader.

With just nine affiliates under its wing, the newly separated GS Group will focus on energy and retail.

Group chairman Koo Bon-moo yesterday called for thorough brand management amid its growing importance in raising corporate value.

"Brand management should be a core management activity as it has emerged as an important element upon which (a company's) competitiveness depends," Koo said during an address to 400 executives gathered at company headquarters in Yeouido, southwestern Seoul.

"We must only use the LG brand on businesses and products that can be number one. There should be no incident of misuse or abuse of the brand through thorough management," he said.

The chairman also called for employee efforts to make products and services that move people while making LG a company sought after by talented jobseekers.

Microsoft Corp. CEO Bill Gates sent a videotaped message praising LG for providing innovative technology and solutions.

(mhkim@heraldm.com) By Kim Min-hee

The Korea Herald : The Nation's No.1 English Newspaper

Big Blue Propels Alumni to Power

My 1st job after the Military services, IBM is the 1st corporation that I joint.

I strongly believe that IBM or any of the corporation's do influence a person career path & the Characters in life.

I would write more on this topic. in my later posting.


Big Blue Propels Alumni to Power
March 20, 2005 By Dennis Fisher and Dennis Callaghan

When Sam Palmisano became CEO of IBM in 2002, he was, in many respects, a predictable choice to run a major company. His pedigree included stints running a number of IBM's key divisions, including the Enterprise Systems Group and IBM Global Services.

It's a background Palmisano shares with a number of technology's heaviest hitters, including CEOs John W. Thompson of Symantec Corp., Michael Lawrie of Siebel Systems Inc. and John Swainson of Computer Associates International Inc. While Palmisano rose through the ranks to the ultimate IBM post, the others chose to take their talents and experience on the road. All, however, are evidence of a growing industry phenomenon: the Big Blue boss.

The steady stream in recent years of top IBM executives—many of them veterans of 25 years or more with the company—leaving for the corner office at other major technology companies is not the result of coincidence. Industry observers and former IBM employees say it's the direct result of a corporate culture that emphasizes experience; loyalty; initiative; and, above all, focus on customer needs.

Many companies, both in the IT industry and other markets, profess similar values. But beginning with IBM founder Thomas Watson and continuing for the nearly 100-year history of the company, it has consistently pushed these tenets on its hires, resulting in a cohesive employee base around the world. In recent years, that system has developed into what amounts to a Triple-A system for aspiring CEOs, analysts say.

The result is an industrywide distribution not only of IBM's corporate culture but also of its business thought processes. For good or ill, the IBM penchant for partnership, appetite for acquisition and intolerance for sluggish performance are all becoming the norm in executive suites well beyond Armonk, N.Y.

Swainson, IBM's former vice president of Worldwide Software Sales, took the helm of scandal-ridden CA last month with the goal of restoring credibility to the embattled Islandia, N.Y., company. Early on, Swainson said, he became aware of the stark contrast between IBM's well-defined culture and the lack thereof at CA.

"It's a function of being built by acquisition over the course of a relatively short period," Swainson said of his new employer. "IBM had a chance over 100 years to build a strong culture.

"I'm not consciously trying to bring any parts of IBM culture to CA. Unconsciously, I can't avoid it, I suppose. I certainly was heavily indoctrinated with it," said Swainson, who ran a unit in IBM with more employees and higher annual revenues than CA's.

"IBM does a lot of good things around process and focus on customers and making sure the customers are satisfied," Swainson said. "Those are clearly messages I would bring to CA. They are not unique to IBM. Every successful company has a view of what it takes to satisfy customers."

As successful as IBM alumni such as Swainson, Thompson and others have been, there was a time, not so long ago, when other companies wanted little to do with hiring an IBM executive as CEO. The problem, observers say, was IBM's rigid hierarchical culture that prevented all but the top tier of executives from gaining any meaningful management experience.

"Things have changed now, but the culture was extremely rigid under [former CEO John Akers]. They literally had people carrying the bags of senior executives," said Frank Dzubeck, president of Communications Networks Architects Inc., in Washington, and a longtime IBM observer. "The result was that the lower-level guys couldn't manage their way out of a paper bag. That changed under [Louis] Gerstner [Palmisano's predecessor]. Executives have become more involved and hands-on."

IBM as a training ground.

Part of that cultural shift involved moving senior executives among the various business units within IBM as a way to give them experience with all the company's assets. Palmisano, as well as Swainson, Thompson, Lawrie and other prominent IBM alumni, have traveled this route. Thompson, for example, worked in sales, marketing and software development and, at the end of his IBM career, was running IBM Americas.

"Everybody has passed through various parts of the business, and all of these guys understand development and sales," Dzubeck said. "If you can be successful at a certain level at IBM, the feeling is you can be successful anywhere."

Lawrie said he took the job at Siebel because he wanted to test that theory for himself. "The reason I left IBM was I wanted the challenge of taking what I learned and [applying] that to a company that was in need of a turnaround," he said in an interview at Siebel's San Mateo, Calif., headquarters.

"Siebel was a turnaround situation. I felt before I hung up the cleats, I wanted a chance to take that knowledge and go test it myself in a challenging, vigorous environment, which is certainly what Siebel and the marketplace that Siebel competes in could be characterized as.

"I found IBM to be a great training program and training for everything. Not only leadership skills [but also] technology skills, how to deal with customers. I think in the IT industry you couldn't hope for a better place to learn about the industry from every dimension than working for a company like IBM. I was global, I lived in Asia Pacific, I ran our EMEA [Europe, Middle East, Asia] operation and then I ran our worldwide operation. So from every dimension—global, financial, technology—I think IBM was a tremendous training ground."

Lawrie has modeled himself after Gerstner, under whose tutelage he worked for eight years during Gerstner's own successful turnaround effort at IBM in the 1990s. Lawrie spent more than 26 years at IBM in management positions, most recently as the company's top sales executive. He has also headed IBM's Personal Software and Network Computing Software groups and managed various overseas operations.

"I learned a lot of important lessons and insights from Lou," said Lawrie. "When you work with someone that is turning around a company, I paid very close attention to what he did. How you approach strategy, how we build a new financial model, how we thought about acquisitions, how we thought about divestitures within our portfolio. So how we repositioned the portfolio of IBM."

Perhaps the most high-profile opening in the industry currently is the CEO spot at Hewlett-Packard Co., and many observers have speculated it could be filled by an IBM executive.

Swainson's former boss, Steve Mills, senior vice president and group executive of IBM Software, declined to comment on offers that he's received, especially recent rumblings that he was on a shortlist of candidates to replace the ousted Carly Fiorina at HP.

Is Carly Fiorina going to run the World Bank? Click here to read more.

"No comment," Mills said with a laugh when asked if he'd consider the HP job. "That will be a unique challenge for somebody."

The division that Mills runs is larger than most software companies in the world. Many of IBM's businesses, including Global Services, are the largest of their kind. The opportunity to run businesses of that size is one of the main reasons many observers believe it is difficult to attract Mills or most other current IBM senior managers. There just aren't many other jobs left at IBM that would be a step up.

But Mills said he did note that the biggest job openings in the tech industry frequently turn into opportunities for IBM executives.

"We have a responsible, mature management team," Mills said. "In the information technology area, if you asked where do people get a good education and a solid grounding in business operations, you'd put IBM high on the list. You get great training early in your career and a customer-centric attitude."

IBM alums' upward mobility.

Even well-placed IBM executives with no designs on a corner office elsewhere see the upward mobility of IBM alumni as an endorsement. "It shows the strength of IBM as a company that develops people," said Janet Perna, general manager of IBM's information management business. "It shows the talent of IBMers and the experience and level of maturity of the people. It's a tribute to IBM.

"There's a certain set of values that IBMers share," Perna said. "A lot has been written about IBM values. About our commitment to our clients, our respect for each other and for people we do business with. About our culture of innovation that matters to the world. Longtime IBMers can't be here very long and not espouse these values."

Perna wouldn't comment on the calls she's received trying to woo her from her job in Armonk. "I love being here," she said. "Everyone is motivated by different things. I couldn't think of a better place to be doing what I'm doing. I'm here, and I stay because my personal values map to IBM's values."

But does the strong IBM culture follow those who leave the fold?

"One person does not a culture make," Perna said. "I don't know the effect. Culture comes from within the body of the company, so it's not clear how much influence any one person can have."

Still, it is impossible not to see the influence IBM's culture and business model have had on some of the company's more famous and successful alumni. A prime example is CEO John W. Thompson of Symantec, which recently merged with storage and backup leader Veritas Software Corp.

Click here to read more about the Symantec-Veritas merger.

Since his arrival at Symantec in 1999, Thompson has been reshaping the Cupertino, Calif., vendor into a pure-play, vertically integrated security company. When Thompson took the reins, Symantec was known as a consumer-focused company with a widely scattered product portfolio that included anti-virus offerings, utilities, scanners and sundry other products, none of which was considered a leader.

By selling or killing underperforming or noncore assets and adding other pieces he saw as key to building an enterprise security leader—including managed services and consulting—Thompson has turned Symantec into not just the leader in the security market but also one of the top five software companies in the world.

Symantec's resemblance to IBM is no mistake. In fact, Thompson has imported so many aspects of the IBM way—efficient, no-nonsense leadership; broad product lines with leading offerings in a number of categories; and a trained army of consultants to help customers use it all—that many industry observers call Symantec "Big Yellow."

Even so, Thompson said he is not necessarily interested in following the IBM game plan to the letter. "There are plenty of businesses they're in that we're not. Even with the similarities in managed services, I'm not interested in the disaster recovery and backup business like IBM Global Services," Thompson said. "That's not a business we want to be in."

Check out eWEEK.com's IT Management Center for the latest news, reviews and analysis on IT management.

Big Blue Propels Alumni to Power

Ebbers: What It Means And What It Doesn't -- Only Thy Know!!

Ebbers was once commendating as an Entrepreneur Icon of the Telecom world. Who raise from a Musician to a Multi-Billions dollar man of the world. Just on one vision & idea!!

But now.. for the past months , he have been going through ordeals in life. For all the Frauds & sins that may be found in Court. As the Guru Bai Ji Yi said:

One person Does or Done, Only Thy Know Him/Her good self!!!!!

Also, As Gotama Buddha said:

It is Greed & Ignorance That cause these bad Karma to Arise!!!!!

Ebbers: What It Means And What It Doesn't
Dan Ackman, 03.16.05, 10:06 AM ET

Whenever a big criminal trial ends, the search for meaning begins, and trends are divined from a sample of one. After the conviction yesterday of former WorldCom Chief Executive Bernard Ebbers on securities fraud and conspiracy charges, the search started anew. It was said that juries will not believe the "CEO doofus" defense and that other CEOs should be worried by Ebbers' fate, which, by the way, could mean 85 years in prison.

The 85 years, however, is just the first fiction. It's the number you get by taking the maximum sentence on each of the nine counts and adding them up. While U.S. federal sentencing rules are in flux due to a recent U.S. Supreme Court ruling, the sentence will certainly be much less. George Newhouse, a criminal defense lawyer with Thelen Reid & Priest in Los Angeles, predicts five to ten years. Douglas Berman, a professor at the Ohio State University law school and an expert on federal sentencing, says so much remains in dispute that the likely sentence is now "unknowable."

In fact, the Ebbers case is a freak by any measure. Start with the simple fact that he went to trial. Of the 82,910 defendants accused in federal courts in 2004, just 3,393, or 4%, stood trial at all, according to the U.S. Office of Court Administration. Securities fraud cases are also extremely rare: In 2004, there were just 116 defendants whose cases were disposed of in the entire U.S., a remarkably small number considering the number of financial restatements, corporate blowups and dream-state analyst reports in recent years. If you are a CEO among the 116, that's cold comfort, but it's not something you really need to worry about.

Worries should dissipate further if your books are clean or if you are truly remote from the crime. "It's not as if he was convicted of something he had nothing to do with," notes G. Jack Chin, a law professor at the University of Arizona. Ebbers was accused of at least knowing and in some ways directing the fraud masterminded by his chief financial officer, Scott Sullivan. While the evidence against him came almost exclusively from Sullivan, the jury was convinced.

Another key fact in the Ebbers case was that he was no longer CEO. The board fired him in 2002, before the fraud was revealed. By the time the company entered bankruptcy, which occurred soon after, the company's board was eager to distance itself from Ebbers and to shift the blame in his direction (and away from the board). Current CEOs don't have this problem.

Some observers say Ebbers lost it by taking the witness stand. Now that he has been convicted on all counts, it is fair to say that the outcome could not have been worse had he stood silent. But his lawyer Reid Weingarten yesterday defended the decision to have the defendant testify, and he is probably right. The "doofus" defense, by the way, was not offered. Ebbers did not claim he knew nothing. He did say he did not know that the WorldCom accounting was fraudulent, and, he noted, many of the company's accountants didn't know that either.

As it was, the case came down to Sullivan's word against that of Ebbers. Without Ebbers testifying, it would have been Sullivan's word against nothing. As it stood, the case was close enough that the jury was out for eight days.

While the jury did not believe him, it's quite possible Ebbers believed himself. Yesterday in an interview, Michael Missal, chief counsel to the examiner in WorldCom's bankruptcy case, said the questionable accounting at WorldCom started well before 2000, when Ebbers' crimes began. The company, which has since emerged from bankruptcy as MCI (nasdaq: MCIP - news - people ), had a practice of overstating reserves set aside after its many mergers. When it needed to show extra income, it would "bleed reserves into income," Missal says.

Other companies do this too, along with other forms of "earnings management." As accepted practices bleed into fraud, it's possible that Ebbers--even if he knew what was happening--thought he was doing nothing illegal.

The Ebbers case does indicate, though, that the Justice Department can win a jury trial on accounting arcana, even against a defendant with all but unlimited resources. This result is not too surprising. Of the eight securities fraud trials nationwide in 2004, the government won six. That's not quite as good a winning percentage as the Justice Department has in other cases, but it's still pretty high. And prosecutors in the Southern District of New York, where Ebbers was tried, have a better record still.

The case also may show that juries are willing to hold CEOs responsible for fraud on their watch--and in the case of WorldCom, the fraud itself was conceded. They proved willing to do this even when the one witness implicating the boss was an admitted criminal. Based on this verdict, Kenneth Lay and Jeffrey Skilling of Enron, and others like them, may indeed grow worried. But the few CEOs in their shoes should have been worried already.

Forbes.com - Magazine Article

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Joint Socal Business Startups 

Sony Breaks With Tradition -- Recognition of Leadership

When I was with NEC back in early 80's perhaps I am the 1st foreigner to have a desk in front of Chief International Marketing. Then I was working on the papers on the Business Strategies for the total NEC offering.. & the Converge of Computers & Communications. Then in 1983, I am back again to convince the Board to have the PC for MSDOS version, later know as APC (Advanced Personal Computer).

It is a hardwork & relationship affairs for a foreigner to convince those Directors' & Board members, as then I can only converse limited Japanese language. The Hierachical Structure of the Corporate Management system is totally Homogenous as its Nation.

Then, the same saga I have been experienced during my career with ICL now is ICL/Fujitsu!!

Again, in my career with Philips N.V., I have been going thru the same experiences again. In My paper "Creating Excellence Philips Corporate Culture" I have single out the inmportant of having:

Multi-Races Management & Corporate Culture

Continue Process To Identify Leader's for the Longevity of The Corporation

Recognitions of Leadership Regardless of the Races or Country of Origin


BeforeSony; the other corporation have install foreigner to the high office is Nissan.

Installing a Head of Corporation is one thing. Most Important thing is that the Trust & the Freedom for the Leader to perform to it's best. Rather than having the his/her time in fighting for the internal politics within the corporation.Due to the Races & Cultural differences for the Longevity of the Corporation.

Sony breaks with tradition
By David Lieberman, USA TODAY

NEW YORK — After years of losing ground to rivals including Apple (AAPL) and Nintendo, the Sony (SNE) board voted today to make Howard Stringer the first non-Japanese CEO of the Tokyo-based consumer electronics and entertainment colossus.

Sony's board met in an emergency session where Nobuyuki Idei agreed to step down as CEO and turn the company over to Stringer, 63, who has overseen its U.S.-based movie and music operations. (Audio: Sony needs to change, Stringer says)

The change would take place following a shareholder vote June 22. Stringer was also nominated for a seat on the board of directors.

"Sony has an unparalleled legacy of boldness, innovation and leadership around the world," Stringer said in a statement. (Related: Japanese carmakers keep grip on control)

"Together we look forward to joining our twin pillars of engineering and technology with our commanding presence in entertainment and content creation to deliver the most advanced devices and forms of entertainment to the consumer."

The ascension of Stringer, one of the media industry's most erudite executives, would have been unthinkable years ago. Japanese companies rarely give such power to foreigners and often protect each other in cartels known as keiretsu.

But years of restructurings failed to lift Sony's consumer electronics business out of its funk.

Chinese manufacturers have pushed prices down. And Sony has failed to keep up in key markets.

It stuck by its MiniDisc portable music players while consumers flocked to Apple's iPods. And Nintendo has control of the portable video game market.

But the entertainment unit that Stringer oversees has lifted Sony's fortunes.

With help from its blockbuster Spider-Man 2, Sony's movie operation was No. 1 in U.S. theatrical market share last year, with 14.3% of ticket sales. That plus robust holiday sales of DVDs of TV hit Seinfeld sent Sony Pictures Entertainment's operating profit up 232%, to $181 million, on revenue of $1.97 billion, up 12%.

Stringer's been an active dealmaker: He led last year's merger of Sony Music with BMG, and recently led a consortium that agreed to buy MGM. That deal is awaiting approval from European antitrust officials.

That's quite a change from the career originally planned by Stringer, who was born in Wales, became a U.S. citizen in 1985, and was knighted by Queen Elizabeth in 1999.

He's an award-winning journalist who rose up the ranks at CBS News before 1988 when he was named the network's president.

His life as a corporate executive almost ran aground after 1995 when three regional Bell phone companies hired him to run Tele-TV, a firm designed to help them compete with cable. The operation fell apart when the companies shifted their focus to long-distance.

Sony hired Stringer in 1997 to run its entertainment units, including Columbia Pictures and the then Sony Music. Stringer current position will not be filled. The entertainment units will continue reporting to him.

Stringer quickly adapted to the Japanese style of management, which eschews fads and focuses on long-term performance. For example, he avoided major investments in Internet companies, leaving Sony relatively unscathed when the bubble burst.

Idei said the time was ripe to hand over leadership to a new team to ensure Sony continues to grow as a global company.

"I am proud to have been a part of the changes at Sony for a decade, including shifting from the analog to digital era," Idei said in a statement.

Contributing: The Associated Press
USATODAY.com - Sony breaks with tradition

Leadership Quality

I am on a trip for conference.. I shall be back by Sunday.

Then I would write the article on above.

Thanks for Visiting.