Plus Ca Change. (Then and Now).

When Chief Executive published its inaugural issue in 1977, Jimmy Carter was president (and author of our first cover story), gasoline cost 64 cents a gallon and inflation was 6.5 percent.

Much has changed since then. Chief Executive, for one. Once a professional journal of opinion featuring interviews with world business leaders and politicians, today Chief Executive focuses on one thing that has changed dramatically in the past quarter century: the role of the CEO.

But as this sample of past stories demonstrates, many of the topics addressed by Chief Executive in its early years continue to concern the business world today. Following are some of the stories Chief Executive published in the '70s and '80s, complete with their modern analogues. Wherever possible and relevant, we've contacted the original authors to gauge how their views have withstood time.

Sonja Sherwood

Women in the boardroom

1978 "Of the top 1,000 Fortune companies, 20 percent have at least one woman on their boards," wrote Felice Schwartz, founder and president of Catalyst, the women's career research organization in New York, in a 1978 article for Chief Executive. "These statistics are noteworthy," she added, "because 10 years ago women in boardrooms were virtually non-existent."

The rest of the story: Women now sit on the boards of 74 percent of the companies in the Fortune 1,000, according to Catalyst's president, Sheila Wellington, who succeeded Schwartz in 1993.

It sounds like progress, but Wellington isn't satisfied. "I'm not very happy with it because there are still 263 all-male boards," she said in a recent interview with Chief Executive. Additionally, more than half of the boards with female directors only have woman, she points out. "When there's only one individual who's different from everybody else, that person is going to be a bit hesitant about broaching difficult issues," Wellington argues.

Though Catalyst's mission hasn't changed since 1978, its means of achieving its goal -- parity in the workplace -- has. Back then, Catalyst worked with individual women to help them advance their careers, much like a coaching service. Starting in the '80s, Catalyst began working directly with companies and organizations as a human resources adviser.

"We believe the big change has to come [from corporations]," says Wellington.

Schwartz died in February 1996.

Nuclear power is safe! Isn't it?

1979 Nuclear power is safe and cost-effective, wrote Dr. Sigvard A. Eklund, then the director general of the United Nations International Atomic Energy Agency. Ekiund argued that the probability of a nuclear reactor accident was "grossly exaggerated."

That March, shortly after Ekiund's article appeared in Cheif Executive, the worst nuclear accident in U.S. history occurred at the new Three-Mile Island reactor in Harrisburg, Pa. Equipment failure and human error contributed to a severe meltdown of the core reactor. The event critically undermined public confidence in the safety of nuclear power. No new nuclear plants have been commissioned in the United States since the accident.

Nuclear's new setback: The George W. Bush administration came into office hoping to stage a nuclear power comeback, but new fears over terrorism may bury the issue once more. Concerned New Yorkers have observed that the hijacked passenger jet that roared down the Hudson River en route to the twin towers on September 11 could have collided with reactors at Indian Point nuclear facility 24 miles north of New York City and perhaps blanketed the eastern seaboard in radioactive fallout. Citizen activists argue that trucks loaded with nuclear waste bound for a proposed storage facility in Nevada's Yucca Mountain risk being waylaid by terrorists. The May arrest of Jose Padilla at Chicago's O'Hare airport on suspicion of plotting to detonate a bomb packed with radioactive material in a U.S. city fed worries over radioactive poisoning.

The probability of these grim scenarios actually occurring may seem "grossly exaggerated," but in light of the new terrorist threat, the nuclear power debate remains as contentious now as it was in 1979.

Eklund died in January 2000 in Vienna at age 89.

Cultural plunder 

1979 In the '7Os, a number of 1979 art collectors were accused by foreign governments of displaying stolen artwork. These disclosures, though embarrassing, were often resolved with a compromise between the gallery and the offended government.

The attitude of Douglas Ewing, then the President of the American Association of Dealers in Ancient, Oriental and Primitive Art, was typical among gallery owners at the time. In a 1979 Chief Executive article, Ewing defended the illicit trafficking of antiques, arguing that the black market fairly rewards art finders for artwork unvalued or poorly cared for by its country of origin.

The art world awakens: As recently as the summer of 1995, John Walsh, then director of the J. Paul Getty Museum in Los Angeles, condoned the purchase of items of unknown origin in an interview with The Art Newspaper in London. The Getty changed its acquisition policy a few months later to correspond with international law, which limits the trade of cultural property. Walsh retired from the museum in September 2000.

Most major museums now have similar acquisition policies in place, but the illicit trade persists, as the February 2001 conviction of New York antiquities dealer Frederick Schultz demonstrates. A federal judge in New York sentenced Schultz to 33 months in prison and a fine of $50, 000 for dealing in illegal Egyptian antiquities. The harsh sentencing was a wake-up call to the U.S. art world, which has historically been more lenient about such matters than European collectors.

"Legislation is beginning to screw down on people who break the law," explains Anna Somers Cocks, editor of The Art Newspaper. "There used to be all kinds of nods and winks that allowed you to pretend you didn't know the law had been broken. People are getting real. They're admitting that there is very little coming on the market now that isn't looted.

About $3 billion in art and artifacts are stolen each year from around the world, according to a 2000 study by the McDonald Institute for Archaeological Research at the University of Cambridge in England.

Audit not do it!

1983 "In the last few months, financial statements by major public companies have unfortunately raised questions about confidence in all published financial statements."

Sound familiar? These words were written in 1983 by Duane Kulberg, then the managing partner and CEO of Arthur Andersen. They appeared in an article for Chief Executive titled, "Making Audit Committees More Effective." Accounting problems had just come to light at Rockwell International and the financial services company Baldwin-United. The savings-and-loan crisis would occur just two years later in 1985.

In the article, Kullberg observed that about 86.4 percent of the 1,000 companies surveyed by the Securities and Exchange Commission had audit committees. This was the happy outcome of a trend set in motion by the SEC in 1972, when it called for the establishment of audit committees made up of outside directors at all public companies.

"One would be naive, however, to assume that all audit committees function effectively," Kullberg wrote 19 years ago, noting that fewer than 20 of the audit committees indicated they review interim financial statements. "They afford an opportunity, but they are not a panacea for financial reporting problems. A few audit committees are still little more than rubber stamps for management."

The rubber-stamping continues: In retrospect, Kullberg's words seem prophetic. It doesn't take a sophisticated sense of irony to appreciate that they came from the head of a firm found guilty in June 2002 of obstruction of justice in the investigation of Enron's spurious accounting. A conviction would effectively end Arthur Andersen's audit practice, the firm said. The auditor spent the first half of 2001 selling off its units as partners and clients fled.

Kullberg retired from Arthur Andersen in 1989. He's now an audit committee member on the boards of the Carlson Cos., the Chicago Board Options Exchange and The John Nuveen Co. He and about 700 other retired Andersen partners filed suit against Andersen in May to preserve their pension and health care payments, which amount to about $3,500 a month per partner for life.

"I think audit committees are usually chaired by knowledgeable business people and that [board governance] will evolve into a very effective process," Kullberg said in a recent interview with Chief Executive. "Audit committees are becoming stronger, but unfortunately the character of business in '90s was kind of a freeform style where the value system became how fast you can make money."

He applauds a recent bill signed by President Bush to hold CEOs responsible for the accuracy of their company's financial statements. The New York Stock Exchange seconded the proposal in June. "I agree CEOs have to be responsible," Kullberg declares. "I think the comments by Ken Lay [saying he didn't know what was happening at Enron] were unconscionable. There's no substitute for the action of the person at the top."

White-collar crime spree

1984 "Embezzlement is happening all over," complained William Callahan, president of United Intelligence, or Unitel, a firm that specializes in the prevention and detection of white-collar crime. His comment appeared in a 1984 article, "The Thief Executive."

At that time, executive crime amounted to more than $44 billion a year, according to a Joint Committee of Congress and the U.S. Chamber of Commerce. The entertainment industry looked especially smarmy in the late '70s after executives at Columbia Pictures, CBS Records and Warner Communications were convicted of cheating shareholders.

More crime, not enough collars: Callahan, who is still running the 25-year-old company, now estimates white-collar crime in the trillions of dollars. No truly comprehensive tally is possible, according to a source at the U.S. Bureau of Justice Statistics.

One need look no further than the daily newspaper to see that securities fraud is the scam du jour. Recent front page stories include the arrest of Adelphia's former CEO John Rigas and his two sons, as well as the indictment of Sam Waksal, ex-CEO of ImClone.

As The Wall Street Journal's Holman W Jenkins Jr. observed recently, we're always in the midst of a white-collar crime wave; on a single day in 1999, the SEC brought civil actions against 11 CEOs and 57 other senior executives.

Callahan declares that white-collar crime is a growth industry. Today's favorite grift, he says, is offshore money laundering. "A lot of wealthy people are foolishly attempting to put money in the Bahamas, Costa Rica or the Cayman Islands and hoping they don't get caught," he says.

Inertia in Russia

1986 It wasn't so long ago that the Soviet Union lay across Eastern Europe like a red carpet. Despite Cold War tensions at that time, the USSR was reputed to be a fertile market for adventurous American companies.

In 1986, deals with the Soviets were lucrative, wrote Donald F.B. Jameson, a former member of the CIA and vice president of Research Associates International, a risk assessment firm in Arlington, Va. "The Soviets pay above-market prices and pay promptly. Negotiating can be trying, even for the big boys," he wrote in Chief Executive in a spring article titled, "Trading with the Soviets."

"But if you have what they want and are persistent, you may well end up with a good deal, and after having clone one deal, others usually follow. Trading with the Soviets is a race that goes to the strong," Jameson said.

Despite occasional tales of foreign businesses accused of espionage or seized by the Soviet government, executives like Armand Hammer, CEO of Occidental Petroleum, fashioned themselves trade ambassadors.

Fast-forward to the fall of communism: The Soviet Union gave way to open markets in 1991. Yet the hazards of doing business with the former superpower persist.

Profit-making has been unpredictable. Those who embraced the newly privatized oil sector were among the first to be burned by business practices left over from the Cold War. Corruption and insider dealing were rampant at energy companies like Gazprom, while promises of reform came to naught under Boris Yeltsin's hand. Early investors saw their money vanish as the ruble crashed in 1998. Between 1998 and 1999, U.S. exports to Russia fell 42 percent, according to a recent report by the U.S. Department of Commerce International Trade Administration.

Trade with Russia is once again picking up. In 2001, Russia imported nearly $2.6 billion in U.S. products, recovering a third of its post-1998 losses, according to the U.S. Department of Commerce. Exporting to former Soviet satellite states is said to be challenging, but demand there for food and machinery, as well as electrical equipment and passenger cars, is slowly growing.

Russian President Vladimir Putin seems willing to forfeit old treaties and follow China into the World Trade Organization, but as David Sanger observed in last month's issue of CE, "When it's faster to negotiate arms control accords than to import chickens, a political problem is brewing."

                         Where Are
Year  Name, Tenure       They Now?             Known For

1986  Roger Smith,       Spending time         Kept GM afloat
      General Motors,    with grandchildren    during invasion
      1981-1990          and hunting and       of import cars,
                         fishing.              created Saturn.




1987  Charles Knight,    Still chairman.       Known for his
      Emerson Electric,  Fond of duck          influential
      1973-2000          hunting in Missouri.  management
                                               style.







1988  J. Willard         Last seen at a        His name is
      Marriott, Jr.,     White House           recognized
      Marriott,          briefing on terror    worldwide for
      1972-Present       insurance.            hospitality.







1989  Donald             Chairs University     Made quality
      Petersen,          of Washington,        job No. 1 once
      Ford Motor,        reads Ehrenreich      again, grew
      1980-1990          and D'Souza.          record profits.






1990  Anthony            Works for peace       Known as a
      O'Reilly,          in Ireland as         cost cutter who
      H.J. Heinz,        founder of The        established
      1979-1998          Ireland Funds.        global clout.







1991  Wayne              Died July 8,          Split beverages
      Calloway,          1998, of              from snacks
      PepsiCo,           prostate cancer       and spun off
      1986-1996          at age 62.            Tricon.







1992  P. Roy Vagelos,    Chairs Regeneron      A donnish CEO
      Merck & Co.,       Pharmaceuticals       who led a
      1985-1994          and Theravance.       research-fueled
                                               boom.




1993  Jack Welch,        Author, consultant    Fixed GE
      General Electric,  and TV commentator.   before it broke,
      1981-2001                                turning it into a
                                               dream stock.




1994  Bill Gates,        Still chairman        Created, then
      Microsoft,         Combats disease       dominated,
      1975-2000          through his           the software
                         foundation.           market.







1995  David Glass,       Chairman of           Built Wal-Mart's
      Wal-Mart,          Wal-Mart's            data-linked
      1988-2000          executive commitee.   distribution
                                               system.






1996  Roberto            Died Oct. 18,         Made Coke
      Goizueta, The      1997, at age          into the penultimate
      Coca-Cola Co.,     65                    global brand.
      1981-1997




1997  Andy Grove,        Chairman and          Helped pioneer
      Intel,             author of two         the power
      1987-1998          business books        processor.
                         and a memoir.






1998  Lawrence           Honeywell chairman,   Integrated,
      Bossidy,           co-author, and        restructured
      AlliedSignal,      grandfather of 25.    org and boost
      1991-1999                                productivity.






1999  Herb Kelleher,     As chairman,          Created airline
      Southwest          Kelleher Still        upstart with
      Airlines,          likes a cigar         signature iconoclast
      1982-2001          with his gin.         style.





2000  John               Just named            He is synonymous
      Chambers,          "Best Investor        with the "backbone
      Cisco Systems,     Relations CEO"        of the internet."
      1995-Present       by national org.







2001  Michael Dell,      Last spotted          His direct-sale
      Dell Computer      wearing gold at       model revolutionized
      1984-Present       the NYSE (see         the PC market.
                         story, pg. 110).







Year  Name, Tenure       In Their Words, Back When

1986  Roger Smith,       "We're no longer the high-cost
      General Motors,    producer. A lot of people say
      1981-1990          Alfred P. Sloan must be spinning
                         in his grave. I say, 'Not on your
                         tintype.' He would have done
                         exactly what I have done and maybe
                         even more."

1987  Charles Knight,    "My definition of tough is people
      Emerson Electric,  who want to be measured, to have
      1973-2000          their performance talked about and
                         to be compared to tough targets.
                         Some people think tough is someone
                         who is mean, cruel and unfair.
                         That's not it at all. I set tough
                         targets and am demanding, so in
                         that sense I am tough; but I am
                         fair."

1988  J. Willard         "I try not to talk very much.
      Marriott, Jr.,     Having attended gatherings where
      Marriott,          other CEOs are called upon to give
      1972-Present       reports. I've noticed that many
                         speak in the first person: 'I
                         did this,' or 'I did that.' We
                         tend to trip over our own egos a
                         lot, because, I suppose, most of
                         us fight so hard to get to the
                         top."

1989  Donald             "Knowledge, technology and capital
      Petersen,          flow so quickly and so easily
      Ford Motor,        across national borders that no
      1980-1990          competitive advantage can be
                         guaranteed a long life. American
                         industry must continually
                         innovate, update, rethink and
                         improve merely to keep pace in
                         the competitive race."

1990  Anthony            "Globalization of markets is not
      O'Reilly,          a future dream; It's a daily
      H.J. Heinz,        reality. We are all--all
      1979-1998          manufacturers of the world--going
                         to have to think that way. We're
                         going to have to engineer global
                         products. We cannot assume that
                         the way to do it in Tokyo is the
                         way to do it in Wichita or
                         Pittsburgh."

1991  Wayne              "The drive to get to every
      Calloway,          individual customer is still
      PepsiCo,           there. One wants sour cream and
      1986-1996          onion, and somebody else wants
                         banana, and somebody else want
                         whatever. You have to keep testing
                         that limit. But you'd better do
                         it very carefully, because you can
                         dilute the brand strength until
                         there's nothing left."

1992  P. Roy Vagelos,    "At heart, I am a scientist. I take
      Merck & Co.,       particular delight in identifying
      1985-1994          new molecular mechanisms to battle
                         disease. But I am also a
                         businessman. So it is similarly
                         gratifying when such mechanisms
                         give Merck a competitive edge."

1993  Jack Welch,        "My reputation for harshness is
      General Electric,  overblown. From the beginning, it
      1981-2001          was stamped into my forehead.
                         Though to a certain extent, it's
                         understandable. I made changes
                         that upset people's lives. They'd
                         like somebody to blame."

1994  Bill Gates,        "I don't want to grow old; I wantp
      Microsoft,         to maintain the energy and
      1975-2000          intelligence necessary to read and
                         synthesize everything. When I was
                         in my early 20s. I thought somebody
                         in their late 30s wasn't all that
                         sharp. Now, I've decided I'm still
                         fairly sharp. [But] I have to sleep
                         every night, and it wastes so much
                         time."

1995  David Glass,       "[Wal-Mart founder] Sam Walton had
      Wal-Mart,          strong beliefs about retailing,
      1988-2000          many of which I share, partly
                         because we both grew up in rural
                         towns, where you learn a work ethic
                         and an approach to integrity. I
                         needed to keep all of Sam alive
                         that I could, and yet be David
                         Glass. It has been difficult."

1996  Roberto            "My successor will need a
      Goizueta, The      tremendous amount of energy.
      Coca-Cola Co.,     Intelligence is not so important.
      1981-1997          Frankly, many people around me are
                         more intelligent than I am, but you
                         have to have energy 24 hours a
                         day."

1997  Andy Grove,        "I'm happy with my career. I'm
      Intel,             delighted with Intel. I'm delighted
      1987-1998          with Intel's role. An I don't think
                         I've made major personal
                         compromises. I've got family I'm
                         happy with, and who most of the
                         time are happy with me. I've
                         enjoyed my life. I've enjoyed my
                         work."

1998  Lawrence           "Most companies do a lot of the
      Bossidy,           same things. The difference is
      AlliedSignal,      intensity. When I came to Allid-
      1991-1999          Signal, the most glaring concern
                         was a lack of confidence. People
                         were downtrodden, disillusioned and
                         disappointed. So the essential
                         thing was to lift all boats, to
                         communicate things we could do."

1999  Herb Kelleher,     "Most things are very simple.
      Southwest          Einstein said that. The simpler
      Airlines,          it is, the more likely it's true,
      1982-2001          in effect. We tell our people.
                         'Don't worry about profits. Think
                         about customer service.' Profit is
                         a by-product of customer service.
                         It's not an end, in and of itself."

2000  John               "There's always an Intergalactic
      Chambers,          battle star about to destroy Cisco.
      Cisco Systems,     If our confidence starts to get a
      1995-Present       little too strong, I jump over to
                         the paranoid side and say. 'Here
                         are all the things that can go
                         wrong.' If our confidence starts
                         to share, I jumpover to the
                         positive--here are all the things
                         that can go right."

2001  Michael Dell,      "I always tried to say. 'What are
      Dell Computer      the things that I'm able to do, but
      1984-Present       what are those things that we
                         really need help with?' I've
                         learned the hard way, but also
                         tried to get the best talent I
                         possibly could to help us lead
                         the business and not repeat our
                         mistakes."

then and now

RELATED ARTICLE: Terrorism Retrospective

IN THE SPRING 1978 ISSUE, long before terror reached American shores, CE published a special report on terrorism. It featured articles written by a political leader, a businessman and a union chief. Their arguments foreshadow debates that took place after September 11.

* Martial law can be applied democratically, said Ferdinand Marcos, then President of the Philippines: "A government beset by insurgency must decide whether to survive through the application of the law or to surrender to the rebels and anarchists and allow the entire body politic to be held hostage by terrorism."

* Terror will spread unless we find a unified response, said Otto Wolff von Amerongen, chairman of Otto Wolff AG and the German National Chamber of Commerce: "The peoples of Western Europe in particular, but also the American people, must make clear representations to their governments to intensify security measures, including international collaboration in the search for terrorists, regardless of the cost."

* Boycott nations that impede the fight against terror, said Heinz Klunker, president of the Union of Public Service and Transport Workers of Germany and chairman of the International Union of Public Service and Transport Workers: "I advocate a comprehensive transport boycott of all transport means against such states that do not effectively fight terrorism. Measures taken to fight terrorists must have an international scope and must be agreed upon internationally to be successful."

Fuel Facts and Fantasies

WHEN CE LAUNCHED IN 1977, the country was recovering from the OPEC embargo and obsessed with rising oil prices and dwindling reserves. Below we test some of the more improbable statements made in the magazine against the lens of time.

* "Oil as a source of energy will be finished in 25 years' time." --The Shah of Iran, September 1977. Wrong: The U.S. Geological Survey estimates that between 1.4 trillion and 2.1 trillion barrels of oil remain to be produced worldwide. This would sustain the current rate of consumption for 63 to 95 years. Iran currently has oil reserves of about 93 billion barrels, or 9 percent of the world's known reserves.

* "Oil and natural gas represent 75 percent of our fuel load. By the year 2000, we anticipate that oil and natural gas should be down to about 50 percent of our energy supply." --Dr. James Schlesinger, secretary of the U.S. Department of Energy, spring 1979. Wrong: Oil and natural gas generated 62 percent of America's energy in 2000 and 2001, according to the Energy Information Administration.

* "Increases in the price of oil over the next decade could average as high as 10 percent a year." --John C. Sawhill, the president of New York University and former member of the U.S. Energy Administration, in a 1977 article titled "$1.85 a gallon in 1987." Part Wrong, Part Correct: A gallon of gasoline only cost $1.52 in 1987 when adjusted for inflation. But prices did rise by an average of 10 percent over the decade as Sawhill predicted, and only dropped sharply in 1986 and 1987. Oil prices reached their all time high in 1981 at $1.35 per gallon, or $2.67 in 2002 dollars. Last year consumers paid $1.55 per gallon, according to the Energy Information Administration.