What Companies Expect from Their CEOs
While I agree that U.S. boards of directors seem ever more willing to drop the trap door under their CEOs, firing the chief is only the tip of the governance iceberg ("The CEO Trap," Cover Story, Dec. 11). For every such CEO mutiny launched by impatient boards, there are a dozen cases of boardroom insubordination, such as the thumbs-down that Coca-Cola Co.'s board gave CEO Douglas N. Daft's plan to acquire Quaker Oats Co. in November.
While such activism shows a newfound board seriousness on shareholder value, the long-term consequences are very uncertain. When a CEO is ousted, the analysts, investors, and other corporations can at least assume that the new leader will have the final say for the company. But when CEOs are increasingly second-guessed by their directors, have we replaced the imperial CEO with imperial boards?
Ralph D. Ward
Publisher, Boardroom INSIDER
Some corporate boards have overlooked two developments that should drastically alter the role and expectations of the 21st century CEO: teamwork and knowledge creation. Teamwork has become the driver of most successful companies today, for we realize the benefits of collaboration. It is odd that this focus on teamwork has not been extended to the CEO's office. Why are teams crucial to the success of individual projects, yet we charge a single person with running the entire company? Wouldn't it make more sense to have a true team running the organization?
Also, the key to many companies' value today is knowledge creation. But the last thing the experts who are creating knowledge need is a powerful superhero CEO telling them what to do. Instead, the CEO office should facilitate the work of the experts and stay out of the way as much as possible. Until more boards focus on these issues, CEOs will continue to get too much credit when things are good and too much blame when they are bad.
Dana R. Hermanson
Corporate Governance Center
Kennesaw State University
Kennesaw, Ga.Return to top
AT&T Is Paving the Broadband Highway
"Why most of us can't have broadband" (Technology & You, Dec. 4) claims that AT&T has abandoned plans to provide voice and data over the cable networks we purchased. The story: "Who will finance the overhaul of the nation's largest cable network" following AT&T's restructuring?
In fact, more than 75% of those networks will have been upgraded for two-way digital communication by the end of this year. AT&T Broadband recently added its 500,000th cable telephony customer--more than any other U.S. cable company. That's up from 79,000 at the beginning of the year. And AT&T Broadband also recently added its 1 millionth high-speed data customer--more than any other cable company.
The pace at which we have been installing those services has increased sharply throughout the year and will continue in the coming months. With a revenue increase of nearly 11% in the third quarter and with $9.3 billion in revenue over the past 12 months, AT&T Broadband is on track to be financially and operationally ready to continue its success. And it will continue to operate under the AT&T brand. I would hardly call that abandoning our plan.
Basking Ridge, N.J.Return to top
OSHA's Approach: Government Knows Best
Charles Haddad got one thing right in "OSHA's new regs will ease the pain--for everybody" (Workplace, Dec. 4). Thousands of companies have indeed implemented programs to limit repetitive-stress injury complaints, with great success. According to the Labor Dept., such injuries have declined 34% over the past three years.
The problem is that none of the companies cited as shining examples--all of them members of the National Association of Manufacturers--has ergonomics programs that meet the Occupational Safety & Health Administration's stringent standards. In fact, no company in the country would measure up. And therein lies the business community's problem with the regulation: It is a "government knows best" approach at a time when free-market forces already are working to address employee needs. Worse, the regulation expands OSHA's reach beyond the workplace and into the homes, softball fields, and bowling alleys of America by defining work-related injuries as those only aggravated by, not necessarily caused by, work. Sweeping, one-size-fits-all, command-and-control rules don't ease the pain. They are a pain.
Vice-President, National Association of Manufacturers
WashingtonReturn to top