IT Weekly Middle East Newsletter 6th March 2005

The recent ousting of HP chairman and CEO Carly Fiorina and the slightly-less recent appointment of John Swainson as president and CEO of Computer Associates are both based on a common thread: the need for accountability.

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By  Peter Branton Published  March 6, 2005

Being held accountable for what you say and do|~||~||~|The recent ousting of HP chairman and CEO Carly Fiorina and the slightly-less recent appointment of John Swainson as president and CEO of Computer Associates are both based on a common thread: the need for accountability. Accountability can take many forms: a company’s board has to be accountable to its shareholders. A corporation will also have regulatory duties it must comply with in the countries it operates in. In Fiorina’s case, she was removed from her position because HP shareholders no longer believed that she was able to deliver the results they wanted. Swainson meanwhile has taken the helm at Computer Associates because former chairman and CEO Sanjay Kumar was forced to stand down over claims that the company where under his leadership had committed financial malpractices, namely booking income it shouldn’t have done. This not only attracted the wrath of the US Government, with Kumar now having been indicted on charges of fraud, but also the shareholders. Having paid high valuations for shares based on reported figures, financial institutions were unsurprisingly not very happy to discover that those reported figures were not to be trusted. While accountability to shareholders and to government regulators is always going to be enforceable do firms have to be accountable to other parties? Some might say that firms should also be aware of their relationships with their customers and be accountable to them. Good customer relations are often touted in the IT industry as a desirable goal, but it has often fallen short of delivering on this. Take CA. The optimist will look at the company’s attempts to distance itself from its past and say that they are to be applauded, the cynic will look at them and say what a past it had. The financial scandal that brought down Kumar was only part of it: perhaps worse was the terrible reputation it had built up with its customer base. Swainson, to be fair, has done more than acknowledge this: he is actively seeking to change it. In the Middle East, CA has hired one of the most respected figures in the region’s IT industry, Gilbert Lacroix, to head up its operations and he has said that good customer relations are key to his success. This is to be applauded, its vital that people in the region follow through on global “initiatives” otherwise they become meaningless. It would be good to see more evidence of customer focus from other IT companies. While it is commonplace for large corporations in the UK to separate the offices of chairman and CEO, in the US-dominated IT industry the same person usually holds both positions. By having a chairman who can keep an eye on the CEO, the latter is more likely to toe the line, is how the thinking goes. Sometimes, it is simply a question of focus: Bill Gates stepped aside as CEO of Microsoft so that Steve Ballmer could focus on running the business while he paid attention to product development. But its significant that part of Ballmer’s brief has also included paying closer attention to customers. Microsoft has tried in the past few years to be more responsive to its customers needs, for instance taking issues such as security more seriously. Would a cynic say that’s only because it is concerned that it will lose customers if it doesn’t? Yup. Accountability then is not something that is only of interest to big investors or government bodies: it concerns us all as customers of the IT industry. We will only get the industry we deserve if it understands that it is accountable to our needs. ||**||

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