
CEO Responds to Nun's Urging a 'Politically Correct' Board Make-up (1996) - PKop
http://www.cypress.com/?rID=34986
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xyzzyz
_Suppose that Intel 's lowest-paid trainee earns $15,000 per year. The 50 to 1
CEO salary rule would mandate that the salary of Intel's co-founder and CEO,
Andy Grove, could be no more than $750,000. (...) Consequently, the practical
meaning of this "responsible corporation" law to Intel would be this gun-to-
the-head proposition: "Either cut the pay of your Chief Executive Officer by a
factor of four from $2,756,700 to $750,000, or pay the federal government an
extra $395 million in taxes."_

I wonder if raising trainee's pay as a solution to this "problem" was
deliberately omitted, or it did not even occur to T.J. Rodgers.

~~~
daniel-cussen
As long as we're not omitting solutions, Intel could lay off its lowest paid
trainees.

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adaml_623
Mr Rodgers makes some very good points in his letter. Definitely where it
comes to board membership and the ethics of inisiting on 'balanced' board make
up.

However I'm not sure about the inherent logic in Paragraph N:

'The May 13, 1996 issue of Fortune magazine analyzed the ethical mutual funds"
which invest with a social-issues agenda, and currently control $639 billion
in investments. Those funds produced an 18.2% return in the last 12 months,
while the S&P 500 returned 27.2%. The investors in those funds thus lost 9% of
$639 billion, or $57.5 billion in one year, because they invested on a social-
issues basis. Furthermore, their loss was not simply someone else's gain; the
money literally vanished from our economy, making every American poorer.'

Is this is implying that if you make an investment choice for personal reasons
(maybe invest in a family business) and the company returns 10% rather than
20% that you could have received from a different investment that you have
lost 10%. And that you have made the world poorer with that choice. The logic
seems a bit hokey to me.

~~~
thaumasiotes
> Is this is implying that if you make an investment choice for personal
> reasons (maybe invest in a family business) and the company returns 10%
> rather than 20% that you could have received from a different investment
> that you have lost 10%. And that you have made the world poorer with that
> choice. The logic seems a bit hokey to me.

The idea that in that circumstance you've suffered a loss is the concept of
the opportunity cost, one of the most basic ideas economics has to offer.

The idea that by doing so, you've made the world poorer is on less firm
ground, but it's not exactly arcane reasoning. It's the same logic that backs
the claim that high-GDP countries are richer than low-GDP ones -- they have
more money. The general idea here is that if you start with $812 billion, and
you turn it into $755 billion, you've lost money ("become poorer").

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brazzy
While "politically correct" is to me a shibboleth that marks the user as a
vitrolic and dishonest conservative pundit, the letter itself is perfectly
reasonable and polite. However, there is one very interesting part:

 _A search based on these criteria usually yields a male who is 50-plus years
old, has a Masters degree in an engineering science, and has moved up the
managerial ladder to the top spot in one or more corporations. Unfortunately,
there are currently few minorities and almost no women who chose to be
engineering graduate students 30 years ago. (That picture will be dramatically
different in 10 years, due to the greater diversification of graduate students
in the '80s.)_

Well, it is now 17 years later, and the end result doesn't look "dramatically
different" to me. So maybe the criteria (at this level and/or others) aren't
all that objective and rational after all.

~~~
andymoe
One black dude on the board. Unfortunately, not as much progress as one would
have liked.

[http://investors.cypress.com/directors.cfm](http://investors.cypress.com/directors.cfm)

~~~
benjohnson
I disagree. There is 'black dude' on the board based on his rather amazing
qualifications and nothing more. This give me much more hope than if he were
there for other reasons.

~~~
andymoe
I should have said "not as much progress as I would have liked." Also, you
have no more idea the reasons for the make up of the current board than I, or
anyone else, does. I'm happy you are hopeful.

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Joeboy
> What absurd logic would contend that Americans should be harmed by "good
> ethics?"

Why is that absurd? Is it unreasonable to think that, say, Americans might be
expected to pay more for clothes in order to reduce the numbers of people
burned to death in Bangladeshi textile factory fires?

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bjourne
Why are almost all CEO:s and company leaders tall? Is it just a coincidence
and when they selected the "most qualified" candidates almost all of them
happened to be tall? Is it because taller people just are that much smarter
than everyone else?

~~~
thaumasiotes
Well, taller people are somewhat smarter than everyone else. If your model of
CEOs is that they're selected top-down from the smartest members of the
population, you'd probably expect them to be taller than average, because
someone exceptionally smart probably had a lot of different things go right to
achieve their high total, including the particular thing that's related to
tallness.

I tend to assume that most leaders are tall because tallness contributes
heavily to charisma, rather than because it's somewhat related to
intelligence.

~~~
bjourne
I see. Silly me for suspecting it has something to do with discrimination.
That explains why there are so few women on leadership positions -- they are
on average 10-20 cm shorter than men so they are both much dumber and much
less charismatic than guys. It doesn't explain why the tall and hyper-
charismatic smart Dutch men aren't dominating the world. But I guess it's only
a matter of time. Perhaps we should export some of our geniuses to the short
and Asian countries, they obviously suffer from a severe lack of tallintellect
there.

