Agenda For the FUTURE.

In a world of constant, fast, and large-scale change, how can CEOs be effective leaders? At our 3rd annual gathering at JFK's "Winter White House," CE assembled leading business, education, and political thinkers and asked them to come up with a road map for managing complex change.

WHILE TECHNOLOGY continues to drive expansive change, it is by no means clear that it changes everything. Human nature, for starters, is immutable. In proving that point, David Gelernter, a professor of computer science at Yale, questions a central tenet of our time--that we are living in an "information age."

Writing in Commentary recently, he observes that while computers and the Internet are marvelous creations, they are not a revolutionary development in human history. Believers in a "new Information Age," he maintains, make three arguments: that we have sophisticated machines to create, store, and deliver information; that computer networks overcome geography; and that computing networks in their special disciplines can act intelligently.

Gelernter dismisses all three claims. Granted, computers represent huge advances over earlier devices, but their great deeds are in keeping with the long established patterns of the industrial age. Creating machines to move and store information has been a pre-occupation of the 20th century since the advent of radio, color photography, and long-distance telephony. Using technology to defeat distance has been a goal of the Industrial Age since the telegraph and the Panama Canal. Virtual gourmet food may make one feel full but will not keep one from starving. Virtual heat may make one feel warm but will not keep one from freezing. "What we ordinarily fail to take into account when we are adding up the score," Gelernter opines, "is the nature of technological change" and how it impacts social structure.

Peter Drucker says we live in an age of discontinuity. To Charles Handy, it's the age of paradox. For Newt Gingrich it's the age of transitions. In CE'S third annual leadership summit--held in partnership with Spencer Stuart and Castle Harlan's John Castle--the discussion centered on over-the-horizon issues facing business leaders, and Gingrich, the former U.S. House Speaker and CEO of The Gingrich Group, argues that "we are living through two patterns of change." The first is advances in computing and communication where "we are at most only one-fifth of the way through it," and the other, only now beginning to rise, is the combination of nano science, genomic biology, and wireless Web communication. In the following exchange of ideas with participating CEOs, at least one point of agreement emerged. Leadership, and not just at the business level, is increasingly critical in managing this societal change. Both AT&T'S Mike Armstrong and Sealed Air's Bill Hickey observed that CEOs must master three principal f orces if they hope to be effective: talent, technology, and time. The inability to do so, says Spencer Stuart's Tom Neff, partly explains the unusually high turnover in the corner office. Going further, Neff worries that companies are not developing the next generation of leaders fast enough to meet today's need. This concern is echoed at the board level.

Borrowing from such disparate practitioners as Drucker, W. Edwards Deming, George C. Marshall, and Dwight Eisenhower, Gingrich proposes a leadership model based upon vision, strategies projects (which he defines as "definable, delegatable achievement"), and tactics where leaders first listen and learn before they help and lead.

J.P. Donlon

Visions of Change

Newt Gingrich (Gingrich Group): This is really a period much like 1865 and 1905 when you have very big changes under way and the political figures to some extent are secondary figures, barring a crisis; if a crisis occurs they become very big. But in the absence of that, the real transformations taking place are shaped by politics, but not defined by them.

Stevenson invented the locomotive in 1829. And it's important to remember that the steam engine from 1720 to 1865 was, in a sense, the computer of that era because it is collapsing distance. It first allows people to pump water out of mines and then it allows people to create textile mills, which lower the cost of clothing. Beginning in 1807, it powers the steamboats in the U.S., and Stevenson enables it to power the railroad in 1829. All these things are remarkably transformational because they change how people function in profound ways.

In 1832, Abraham Lincoln is a young candidate at 23 years old. He runs for the state legislature and one of his plans is to build a railroad in Illinois. He has never seen a railroad. He has no idea what a railroad is, but he knows instinctively that a device that collapses distance will be invaluable on a region the size of Illinois. He actually comes in 8th out of 13, but runs two years later and wins. He becomes the leading railroad lawyer and wins the key case between the steamship companies, which hit one of the railroad bridges but wanted to insist that railroad bridges are liable any time they get hit by a boat. When you talk about government impacting things, this is a very important transformational decision about the nature of travel in the West.

And the Republican and Democratic parties have in their party platform the creation of a transcontinental railroad at a time when they did not have engines capable of going up the grade for steel cable for the ties. And in the Nebraska or Wyoming area, you didn't have enough wood to lay down the ties. It's one of the great examples of a truly visionary process--government changed the market by giving away money and land in order to attract private capital and private entrepreneurs to create a bigger and better future on a scale nobody could have dreamed possible.

I would suggest that in a time of such great change, if you don't think through your vision clearly, you cannot tell the difference between activity and progress. I just spoke to 20 senior naval civil servants at a week-long retreat on thinking about change, and I said, "If you don't know you're going to Los Angeles, you can jump in your car in the morning and put on 300 miles going in a circle around the perimeter of Washington and you've had terrific activity; your activity report is good. But you haven't achieved anything because you didn't have a benchmark of where you were going before you got in the car." This is true of an amazing percent of organizations.

The next quarter century, I believe, will be an age of transition, because we're riding two parallel "S" curves of technology. An "S" curve is the most common way of representing technological change. It starts slowly, accelerates dramatically and then as it matures, it starts to flatten out. In Peter Drucker's 1967 book, The Age of Discontinuities, he argued that we were coming off of the great transition that began about 1865 with chemicals, steel, etc., and we were now entering the new era.

In terms of planning and leadership, there is enormous power, if you study how George Marshall and Alfred Sloan thought about their jobs. Because in a period of enormous change, it's really important to be able to back out, remember what your vision is, and remember how to define a project and who to hold accountable. Sloan went out every quarter and spent one full week on a lot selling cars to re-immerse himself in the rate of change of the culture because the questions people asked him taught him about the future of the auto industry.

I suggest to you that there are very few CEOs that do that. It's a different kind of discipline, a different kind of approach. George Marshall said after the war, having had three heart attacks before Pearl Harbor was the reason he could do his job, because he knew every morning his energy was limited. So he delegated ruthlessly--everything except setting the vision, level, and strategy for the war. You can't run a big system in a competitive environment and a changing world and not expect it to be hard. I think that's why it's getting harder to find CEOs.

Under the Looking Glass 

J.P. Donlon (CE): Why is it so hard for us to find the appropriate level and number of leaders?

Thomas Neff (Spencer Stuart): CEO turnover is occurring at an unprecedented and alarming rate. It's happening not only in record numbers, but seemingly with less warning. And the tolerance for performance misstep is shorter than any time I know of in governance history.

It certainly feels that way in our own business; we've never had as many big-time CEO searches going on. Our business for the year ending September 30th was up over 40 percent vs. a year ago and it raises a question: Are some boards pulling the trigger too quickly? And I think some of them may be.

It's a new ball game for CEOs; it's no longer three strikes and you're out. It might be one or two. And CEOs are clearly on a shorter leash than they ever have been before--watch out if a CEO misses his numbers for even one quarter, which gives a new meaning to the importance of earnings guidance.

There's no doubt that CEOs are under more stress than ever before. The job is tougher--no question about it. Time demands are certainly greater than they've ever been, both in terms of what needs to be done in the company and dealing with all the outside constituencies and the travel component. And modern technology has caused essentially unlimited access to people. All this makes it harder to manage one's personal time and contributes to turnover.

There's also the changing dynamic not only with boards, but also with major shareholders. Impatient investors and the Wall Street community are generally more unforgiving than ever before. CEOs do have some influence over investors and boards, but other factors have led to the early exit for CEOs.

We also have business consolidations occurring at a more rapid rate than ever before in a number of sectors--oil and gas, financial services, pharmaceuticals, telecoms--which makes most companies either the hunters or hunted. And there will only be one CEO after a combination. The dot-com implosion has taken a number of CEOs and other senior executives down and out. What was once a mouth-watering opportunity has become a career ender for some good people who came over from traditional companies.

Lastly, the unsettled markets can throw a company into a tailspin. We had Asian flu and the impact of the Euro on revenue and profits. It doesn't matter that these conditions are beyond the CEO's control, because he or she is being held accountable for the bottom line.

Michael Bonsignore (Honeywell): I think it's important maybe to pull this apart into its constituent pieces. I go back to the comment about the impatient investor. Are we really dealing with impatient investors or are we dealing with impatient delegates of these investors, who I think are by nature somewhat lazy, who may not be doing as thorough a job as they should be doing of characterizing the importance of this strategic and tactical balance for these companies to be successful?

Thomas Ryder (Reader's Digest): There was one piece missing in your observations and that's the scrutiny that those of us who occupy these jobs get now. It is at one level the rise of business journalism, the competition for information about people, and it is the war for asset gathering, which creates a whole army of analysts who scrutinize what we do.

At one level we are--even though we may try to resist it at all costs--the most public of people. That is wildly different from the way this job was probably carried out, say, 10 years ago. I think of some of the people around the table who have been elevated to almost deity status. Then there's the glee with which the press pricks at that and causes that whole thing to come apart.

Russell Lewis (The New York Times): If I could just come to the defense of the press for half a second, there are two sides to that story. There is much truth to what you are saying. But, on the other hand, you do have CEOs and organizations who have very effective promotional and marketing campaigns and try to use the press in order to market the personalities and the deity status of their CEOs, as well as the efficiency and effectiveness of their organization. I don't think it's all black or all white.

Rick Braddock (Priceline.com): There are other constituent groups that in today's world are not particularly capable of dealing with the things hoisted on them. A board of directors going through a decision about management change, evaluating companies, is probably feeling many of the pressures a CEO does, and yet being a sort of a multi-headed monster. And we're all on boards; we know how boards make decisions.

Mike Armstrong (AT&T): The CEO today has got to understand his relationship with the board. I don't care where you are or where you are coming from. If you haven't educated that board and brought them along so that the risks as well as the things that aren't going to go well are in front of them and they are with you on those risks, obviously they are going to have a short trigger when they do go wrong.

And the strategy damn well better be right, because it's going to get tested not only every quarter, but if they stick with you, it's going to get tested over a period of time. When you come out of that period of time, if you've been on the wrong strategy--no matter how hard you worked--the outcome isn't going to be right.

As for the press, I think in a lot of my career the market defined what the press did reports on. With instantaneous information today, that isn't the way it's going. Today the press is often leading the market, whether we'd like to understand it or recognize it. So it's important to successfully deal not only with our boards, but with the perception of the company.

David Langstaff (Veridian): If a CEO's job is to build sustaining value over time, it's going to take time. It seems to me that one of the skills CEOs have to develop even more than they have is the art of communication. Not only with their own board, but perhaps with the press, to the outside constituents, to try to take a more active role with the insufficiently educated delegatees, if you will, of Wall Street, and begin to set expectations so that we don't have the conflict of what might be one or two or three years vs. three months as a play here.

Leonard Harlan (Castle Harlan): What it goes to is really the stewardship role of the board. And it means the board has to have wisdom, patience, understanding of the vision, and conviction. Not enough thought goes into who makes a good board member other than do they have a good resume, do they look good on paper, and are they articulate, rather than what are qualities that we need to sustain the vision of this CEO and of the company so that people can invest for tomorrow.

Michael Wright (SUPERVALU): Boards take on different styles. And one of the things I've found is that you can be on boards that the people get together and they're all strangers. And they never form a bond. They never form a bond with the CEO. And now it's getting worse because corporate governance committees, which exclude CEOs from being on them, go out and select the new directors. They tend to go to headhunters who give you a long list and you go through names of people you don't really know. I've found that you need the CEO's involvement in this because he wants to have a hand in who is going to be on the board. At least you know what you are trying to do to form a good independent board that can help you.

Also, you've got to get the board away for two or three days, at minimum every other year. And you bring the spouses in, get people to know each other on a different basis than sitting down for four hours at a board meeting. And then go over strategies.

If you've got the right board and you make your strategy presentation, you're going to hear all kinds of thoughts and comments, and some of them are going to be absolutely off the wall. Some of them, which are kind of stupid, keep coming back time and time again because the people get locked into things. But the CEO has got to distill that information and set the vision and the course for the company. And he has to deal with the other thoughts, but that doesn't mean he changes the strategy based upon every comment from a board member.

Arnie Pollard (CE): No, but he needs to convince the board members around the table--including the ones with some of the crazy ideas--that he's integrated their thoughts and he's got a game plan that makes sense. If you've got smart enough board members, they don't expect that every one of those ideas will be adopted. And they don't hold it against you, as long as you've got a game plan that makes sense.

John Castle (Castle Harlan): Obviously in this process, the CEO has to lay out the vision in such a way that he is leading his board. And it's important that he has the initiative. Although I love to delegate, I think the one thing a CEO cannot do is delegate his relationship with his board. You have to mind your own relationship with your boss and in this case it's your board. You can delegate running your whole business, every other aspect of the business, but not the relationship with the board.

Education Proclamation 

Donlon: Shirley, I'd like to ask you to comment on education, in terms of math and science capabilities. As Newt said, if future generations fail to master these skills, then it will be one of the biggest leadership challenges facing this country. Are we getting any better at this?

Shirley Jackson (Rensselaer Polytechnic Institute): Universities are basically organized around the idea that the heart of the university is the faculty. If you don't have the right faculty, and they aren't appropriately motivated, it won't matter how good your students are.

I find it interesting that many of the education strategies don't address in a fundamental way the people who are teaching our young and how to motivate them, particularly those who have real background and knowledge in science and mathematics. We don't have people who themselves are well educated in science and mathematics teaching our students. Talented teachers typically have other career options, particularly with the pace of technological change.

You have to ask yourself, how are you going to get people like that into the education pipeline, and how are you going to motivate them? This may sound heretical, but you can have all the teacher certification you want along with high demands, but if you don't influence who goes into the teaching profession in the first place, then the results never work out. So, we are not where we should be.

Wright: We also have to look at the system because teachers put up with so much in the classroom now that they are basically trying to be babysitters and they can't teach.

Armstrong: While we all understand how bad this K through 12 problem is, and maybe it's getting worse, we still have the finest university and college system in the world. What are some of the common denominators that make it so different? First, it's choice. Students can go to a potpourri of different colleges and universities in this country and they've got to be competitive in order to keep that attraction.

Second, I'm on a John Hopkins board and I can tell you that to attract great scientists and doctors to teach vs. going out there and earning a half a million to $1 million to $2 million dollars to practice, you've got to pay them. And so there is a tremendous amount of money flowing into our university and college systems for the people who are teaching and the facilities in which they teach.

Third, we know how to manage tenure now in the university system and there's a way to merit base promotions and to reward the really accomplished, even if it takes a little longer to get out the tenure. And so somehow we've got to figure out how to get those three attributes into this K through 12 system.

Jackson: There is one more wrinkle to what you said. The percentage of people who are university graduates in this country is still on the order of perhaps 25 percent of the adult population. I would argue that that's not a good enough statistic for K through 12 population.

Over the Horizon

Donlon: What are the most important or critical long-term or short-term challenges facing business leadership?

Art Martinez (Sears, Roebuck): As principally public-company CEOs, we can't lead without the support of our most important constituency, which is our board of directors. The biggest challenge lies with the development and nurturing of that relationship.

Increasingly, there is a risk-averse nature among directors, which makes it difficult to make the affirmative decisions that nurture and sustain an enterprise for a long period of time. It's a real challenge to find directors who are willing to work hard to understand the industry, the competition, the firm, the strategies, and the personal leadership of the enterprise.

Robert Marston (Robert Marston & Associates): I think the search for the truth is probably something we've all thought about. I've spent a lot of time with CEOs, most of my professional career. And the one thing I hear like a mantra is, who can you believe within your own organization? Who can you trust?

When CEOs are in the crisis of just running the company, they really need to trust the people working for them to give advice that is really meaningful and tell them when they think he or she is wrong or just wrongheaded. And by that, I don't mean just trustworthiness, but what their motives are, whether they're speaking for reasons that have to do with self-enhancement, or whether they can really detach themselves like outside counselors often can.

Bill Hickey (Sealed Air): For simplicity, I'll call it the three T's: talent, technology, and time. Talent meaning not only as Tom said regarding the talent to be CEOs or run parts of our business, but even talent in the K through 12, because we are finding operators come into our company to operate machines and we have to teach them the basic math and computational skills.

Where does technology fit in our business? Let's not pursue technology for the sake of technology but it's got to be a profitable technology, so it fits our business and earns a return. And the third T is time. Looking at the multiple obligations of a CEO, how do you best balance your time to meet the constituents that you have to meet and wake up every morning achieving those items on your vision? Overall, I'm an optimist and I believe the strides we've made for hundreds of years that continue to improve and increase the standard of living will continue for the foreseeable future.

Dayton Ogden (Spencer Stuart): I think in one way or another we've all said today that leadership is the most critical variable in a business equation and, perhaps, in a social equation as well. But talent is in short supply and leadership is in short supply--and there are lots of reasons for it.

We talked about education and the need for great companies to mobilize their people--to get them into positions early, to take risks, to experience both sides of the business cycle, success and failure. In the end, I think it's going to be personal leadership, in many cases, that creates an optimistic future.

Who's WHO 

* C. Michael Armstrong is chairman and chief executive of Basking Ridge, NJ-based AT&T, a $64 billion communication services company.

* Michael R. Bonsignore is chairman and chief executive of Morristown, NJ-based Honeywell, a $24 billion automated controls producer.

* Richard S. Braddock is chairman of Stamford, CT-based Priceline.com, an Internet and online content provider.

* Edmund M. Carpenter is president and chief executive of Bristol, CT-based Barnes Group, a $800 million diversified manufacturer of complex metal components.

* John K. Castle is chairman and chief executive of New York City-based Castle Harlan, a private merchant banking firm.

* Newt Gingrich is a former Speaker of the House and chief executive of Atlanta-based The Gingrich Group, a communications and management consulting firm.

* Leonard Harlan is president of New York City-based Castle Harlan, a private merchant banking firm.

* William Hickey is president and chief executive of Saddle Brook, NJ-based Sealed Air, a $2.8 billion provider of a complementary line of protective, food, and specialty packaging materials, and systems.

* Dr. Shirley A. Jackson is president of Troy, NY-based Rensselaer Polytechnic Institute.

* David Langstaff is president and chief executive of Arlington, VA-based Veridian, a $650 million provider and developer of intelligent IT solutions.

* Russell T. Lewis is president and chief executive of The New York Times Co.

* Robert Marston is president and chief executive of New York City-based Robert Marston and Associates, a public relations firm.

* Arthur "Art" Martinez is chairman of Chicago, IL-based Sears, Roebuck & Co, a $40 billion retailer of apparel, home, and automotive products and services.

* Thomas J. Neff is chairman of Spencer Stuart, U.S., an executive recruiting firm.

* Dayton Ogden is co-chairman of Spencer Stuart Worldwide, a global executive recruiting firm.

* Thomas O. Ryder is chairman and chief executive of Pleasantville, NY-based Reader's Digest Association, a global publisher.

* Michael W. Wright is chairman, president, and chief executive of Eden Prairie, MN-based SUPERVALU, a $20 billion food distributor.

Two Americas

A year ago, if you'd said "you ain't seen nothing yet" in terms of closeness in an election, I don't think I would have believed we could end up with the election we just had.

But in the long-run history of America, this may actually be a better result because it's more sobering. The House is almost exactly evenly divided and the Senate is evenly divided. There's a remarkable number of states that are balanced and yet, underneath that picture of balance, we are in some ways a remarkably divided country.

The New York Times, USA Today, and others printed a map of the counties color coded by the two candidates, and it's stark how different the patterns are. There is a very powerful underlying lesson in this election, which is different from what we found in 1994. We designed the "Contract With America" to appeal to the Perot voters and get them to turn out. We ran an intensely positive campaign in September and October. If you go back and look at the ads, we did not mention Clinton or the Democrats. We knew that we had to be positive to draw out votes. The result was the largest one-party increase and turnout in American history. We had a 9 million vote increase over the 1990 Republican vote and a 1 million vote decrease to the Democrats, and the net effect was a swing of 10 million votes.

Having picked up 53 seats, winning the Senate and governorships, we could legitimately arrive in Washington and say, "Hey, here's the contract, this is a real mandate." Now, you have an environment where nobody has a mandate and that will be useful for them to realize when they get there. Whatever their respective transition plans were, they should scrap them, erase the board, and rethink the whole thing. Because the only way to get anything done in the next few years is going to be to really listen to the other side.

Strategically, my advice to liberal Democrats is that you better go out to white conservative rural and suburban America and find out why they're afraid of you. And my advice to Republicans is that you better go to African-American and Latino communities and find out why they're afraid of you. And you'd better take it seriously. If the two major parties don't reknit the country, you'll get three, four, or five elections based on mobilizing your base by polarization.

You really do get into a mutual demonization, and it's a very serious underlying challenge because if we do become two Americas, then whoever wins is always automatically discredited by 40 to 50 percent of the country.

My advice to the Republicans in Congress has been to go very slow and consider suspending fights for six months. Literally just saying, "We're not going to take up issues that we're going to fight over for the first six months of the year." I'm suggesting to the Senate that they actually have a members-only meeting of the entire Senate behind closed doors to see whether or not they can come up with anything they could mutually agree to pass that is worth the exercise, to really try to decompress, cool down--to see if they can't, from the country's standpoint, find a way to put things together.

I also think the explosion of technology potentially gives us a lot of breakthrough points where we can work together on a whole new range of ideas and things that aren't automatically partisan. For example, one of the things I've worked on a lot is diabetes and it doesn't need to be a partisan issue. There ought to be a way to get people together to say, "Let's pass something positive."

We could modernize the Pentagon dramatically in, for example, B2B purchasing through electronic systems. That shouldn't be a partisan issue. So, there ought to be ways to decompress the tone of the city and try to move into some levels of accomplishment. I think we're faced with dramatically greater changes than we yet understand. From the standpoint that this is a much more multi-ethnic society than people yet realize; from the standpoint that we are much more a part of the world community than people realize. That means you've got to have a much more sophisticated strategy for the World Trade Organization and the European Union than we have had any notion of up until now.

I predict that you'll see pressure not just to change health, education, and bureaucracy, but also enormous pressure to go to some kind of electronic voting system that is easier and dramatically more accurate. Within eight years, we'll vote on the Internet all in one day from wherever we are with our PC and we'll probably use our thumbprint as an identifier.

Parrying Cyber-Attack

When I talk with other CEOs about critical information and network security, they express the same fear. They worry about network break-ins tarnishing their companies' reputations and losing them the trust of customers, partners, vendors, and shareholders--a loss that can cause greater economic harm than the intrusion itself. Indeed, it can cast doubt on the CEO'S ability to lead effectively; no leader wants to face a board, shareholders, and customers and explain a network security failure that could have been prevented.

The first thing to remember is that computer networks and telecommunications systems are never 100 percent secure, nor can they ever be made so. Second, internal failure, not external intrusion, is the most common reason for information breaches.

Internal failures occur because information technology and security products are sometimes purchased but not installed, configured, or maintained properly. Even if products are integrated correctly, they become dated; as connectivity expands, new threats emerge, and business processes evolve. Even maintaining a system can have an unintended effect of making it less secure. Holes fixed today are reopened later because someone makes a "performance" improvement without thinking through the security implications.

Network security is an environment of attack identification and defense. One cannot build an information vault or bunker securely enough to withstand every attack, especially when the attack comes from employees who have erred or who have bad intentions. Defense is constant monitoring, parrying attacks, predicting the source of the next attacks, correlating suspicious events, understanding intruders, and then taking proactive steps to establish a secure network environment.

Network vulnerabilities are widespread and security failures common. Cisco Systems, in a six-month survey of 9,874 network interfaces reaching a total of 33,046 network services, found that every network interface had some form of vulnerability. Yahoo! came under investigation when it inadvertently disclosed user data to third parties in violation of federal regulations. De Beers, the diamond merchant house, accidentally published 35,000 customer e-mail and home addresses on its Web site. Nissan Motors suffered a similar failure when it exposed more than 24,000 e-mail addresses on its Web site. The worst case was an ex-Intel engineer who walked off with company documents and computer files related to its Itanium microprocessor. None of these invasions of privacy and security failures came from external intruders.

The Federal Bureau of Investigation testified before a Senate subcommittee that the number of cyber crimes that it investigated doubled between 1998 and 1999-from 547 in 1998 to 1,154 in 1999. The FBI said that neither the Federal government nor state governments have effective means to stop cyber crime. The FBI also noted that cyber crime is borderless. Anyone can strike from anywhere.

CEOs need to understand that trusted security solutions for mission-critical systems start with affordable and enforceable policy. The policy balances security needed for responsible protection against what is affordable. The CEO needs to determine what is "good enough" to secure networks. Few companies or governments can afford the highest level of network security. It requires too many technologies and too much money. CEOs need to think about network security within their business models. Network security is an investment in building and keeping credibility with clients, customers, partners, employees, and shareholders.

Each organization and network within a company is different, and there are no easy cookie-cutter solutions. Each company has to establish its own Internet and networking security policies. In doing so, CEOs should consider these points: the value of information to the company; the risk to the company if the information is compromised; and the existence of a threat that can exploit the information.

Network security is a never-ending, never-done issue. The CEO should receive regular briefings from the CIO on the status of system security and risks. A company's policies and network security tools should be revised regularly based on new vulnerabilities, threats, tools, and connections with new partners and vendors. CEOs don't have to be experts on network security but they can't ignore it either. Breaches can maim companies and cost CEOs their jobs. There's just no substitute for being well prepared.