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Why a Resource Like NutritionFacts.org Is Necessary

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Dr. Michael Greger blogs:

In a study of the dietary advice given by newspapers in the United Kingdom, “no credible scientific basis” was found for most claims. Indeed, “[m]isreporting of dietary advice…is widespread and may contribute to public misconceptions about food and health”—and potentially not only the public.

Scientists like to think they are not influenced by popular media. One study decided to put it to the test. The New York Times reports on scientific research each week, and researchers found that the studies covered by the Times end up being cited in the New England Journal of Medicine more than those that don’t. Seems like the popular press does indeed have an impact on science? Not so fast. That’s just one potential explanation. Perhaps outstanding studies are more likely to be picked up by the media and, independently, more likely to be cited. It’s possible the Times was just earmarking important science and its publicizing of that research didn’t have any effect on how often it was cited in future studies.

How can we disentangle the two? In 1978, there was a three-month strike during which the Times continued to print copies but couldn’t sell them to the public. So, a natural experiment was set up. Researchers compared the number of citations of Journal articles published during the strike with the number published when the paper wasn’t on strike to “discover whether publicity in the popular press truly amplifies the transmission of scientific findings to the medical community.” If the paper were just earmarking important articles, then the strike would have no effect on the studies’ future impact, but that’s not what happened. As you can see from a graph shown in my video Spin Doctors: How the Media Reports on Medicine, the studies covered by the Times during the strike when no one could read them appeared to have no impact on the medical community.

The next question, of course, is whether the press is simply amplifying the medical information to the scientific community or distorting it as well? “[S]ystematic studies suggest that many stories about new medicines tend to overstate benefits, understate risks and costs, and fail to disclose relevant financial ties.” What’s more, “[o]verly rosy coverage of drugs may also result from the direct and indirect relations between journalists and drug companies”—that is, the financial ties between the reporters and Big Pharma with all its perks.

Scientists and physicians often blame the press for the public being “poorly served” by the media’s coverage of medical science. In fact, the famous physician William Osler was quoted as saying, “Believe nothing that you see in the newspapers…if you see anything in them that you know is true, begin to doubt it at once.” Both parties, however, share the blame. Reporters may only have an hour or two to put together a story, so they may rely on press releases. It’s not hard to imagine how drug company press releases might be biased. But, surely, press releases from the scientists themselves and their institutions would “present the facts fairly, unambiguously, and without spin,” right?

Researchers decided to put it to the test. Critics may blame the media, but where do you think the media gets its information? “One might assume” that press releases from prestigious academic medical centers would be “measured and unexaggerated,” but researchers found they suffered from the same problems: downplaying side effects, having conflicts of interest and study limitations, and “promot[ing] research that has uncertain relevance to human health…”

For example, most “animal or laboratory studies…explicitly claimed relevance to human health, yet 90% lacked caveats about extrapolating results to people.” Indeed, “a release about a study of ultrasonography [ultrasound] reducing tumors in mice, titled ‘Researchers study the use of ultrasound for treatment of cancer,’” failed to add “for your pet mouse.”

“For animal research, it is estimated that less than 10% of non-human investigations ever succeed in being translated to human clinical use. Over-selling the results of non-human [lab animal] studies as a promised cure potentially confuses readers and might contribute to disillusionment with science.”

Although it is common to blame the media for exaggerations, most times, they don’t just make it up—it is what the research institutions are sending out themselves. Researchers found that “most of the inflation detected in our study…was already present in the text of the in their own press releases produced by academics and their establishments.” Medical journals, too. Indeed, . . .

Continue reading.

Written by LeisureGuy

19 September 2019 at 9:23 am

How Boeing’s managerial revolution created the 737 MAX disaster

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Maureen Tkacik writes in the New Republic of how modern American capitalism is a failure carrying the seeds of its own destruction:

Nearly two decades before Boeing’s MCAS system crashed two of the plane-maker’s brand-new 737 MAX jets, Stan Sorscher knew his company’s increasingly toxic mode of operating would create a disaster of some kind. A long and proud “safety culture” was rapidly being replaced, he argued, with “a culture of financial bullshit, a culture of groupthink.”

Sorscher, a physicist who’d worked at Boeing more than two decades and had led negotiations there for the engineers’ union, had become obsessed with management culture. He said he didn’t previously imagine Boeing’s brave new managerial caste creating a problem as dumb and glaringly obvious as MCAS (or the Maneuvering Characteristics Augmentation System, as a handful of software wizards had dubbed it). But he knew the culture was going to down a plane at some point, that it was inevitable. He actually wrote about this in one of his reports that no one read.

Sorscher had spent the early aughts campaigning to preserve the company’s estimable engineering legacy. He had mountains of evidence to support his position, mostly acquired via Boeing’s 1997 acquisition of McDonnell Douglas, a dysfunctional firm with a dilapidated aircraft plant in Long Beach and a CEO who liked to use what he called the “Hollywood model” for dealing with engineers: Hire them for a few months when project deadlines are nigh, fire them when you need to make numbers. In 2000, Boeing’s engineers staged a 40-day strike over the McDonnell deal’s fallout; while they won major material concessions from management, they lost the culture war. They also inherited a notoriously dysfunctional product line from the corner-cutting market gurus at McDonnell.

And while Boeing’s engineers toiled to get McDonnell’s lemon planes into the sky, their own hopes of designing a new plane to compete with Airbus, Boeing’s only global market rival, were shriveling. Under the sway of all the naysayers who had called out the folly of the McDonnell deal, the board had adopted a hard-line “never again” posture toward ambitious new planes. Boeing’s leaders began crying “crocodile tears,” Sorscher claimed, about the development costs of 1995’s 777, even though some industry insiders estimate that it became the most profitable plane of all time. The premise behind this complaining was silly, Sorscher contended in PowerPoint presentations and a Harvard Business School-style case study on the topic. A return to the “problem-solving” culture and managerial structure of yore, he explained over and over again to anyone who would listen, was the only sensible way to generate shareholder value. But when he brought that message on the road, he rarely elicited much more than an eye roll. “I’m not buying it,” was a common response. Occasionally, though, someone in the audience was outright mean, like the Wall Street analyst who cut him off mid-sentence:

“Look, I get it. What you’re telling me is that your business is different. That you’re special. Well, listen: Everybody thinks his business is different, because everybody is the same. Nobody. Is. Different.”



And indeed, that would appear to be the real moral of this story: Airplane manufacturing is no different from mortgage lending or insulin distribution or make-believe blood analyzing software—another cash cow for the one percent, bound inexorably for the slaughterhouse. In the now infamous debacle of the Boeing 737 MAX, the company produced a plane outfitted with a half-assed bit of software programmed to override all pilot input and nosedive when a little vane on the side of the fuselage told it the nose was pitching up. The vane was also not terribly reliable, possibly due to assembly line lapses reported by a whistle-blower, and when the plane processed the bad data it received, it promptly dove into the sea.

It is understood, now more than ever, that capitalism does half-assed things like that, especially in concert with computer software and oblivious regulators: AIG famously told investors it was hard for management to contemplate “a scenario within any kind of realm of reason that would see us losing one dollar in any of those transactions” that would, a few months later, lose the firm well over $100 billion—but hey, the risk management algorithms had been wrong. A couple of years later, a single JP Morgan trader lost $6 billion because someone had programmed one of the cells in the bank’s risk management spreadsheet to divide two numbers by their sum instead of their average. Boeing was not, of course, a hedge fund: It was way better, a stock that had more than doubled since the Trump inauguration, outperforming the Dow in the 22 months before Lion Air 610 plunged into the Java Sea.

And so there was something unsettlingly familiar when the world first learned of MCAS in November, about two weeks after the system’s unthinkable stupidity drove the two-month-old plane and all 189 people on it to a horrific death. It smacked of the sort of screwup a 23-year-old intern might have made—and indeed, much of the software on the MAX had been engineered by recent grads of Indian software-coding academies making as little as $9 an hour, part of Boeing management’s endless war on the unions that once represented more than half its employees. Down in South Carolina, a nonunion Boeing assembly line that opened in 2011 had for years churned out scores of whistle-blower complaints and wrongful termination lawsuits packed with scenes wherein quality-control documents were regularly forged, employees who enforced standards were sabotaged, and planes were routinely delivered to airlines with loose screws, scratched windows, and random debris everywhere. The MCAS crash was just the latest installment in a broader pattern so thoroughly ingrained in the business news cycle that the muckraking finance blog Naked Capitalism titled its first post about MCAS “Boeing, Crapification and the Lion Air Crash.”

But not everyone viewed the crash with such a jaundiced eye—it was, after all, the world’s first self-hijacking plane. Pilots were particularly stunned, because MCAS had been a big secret, largely kept from Boeing’s own test pilots, mentioned only once in the glossary of the plane’s 1,600-page manual, left entirely out of the 56-minute iPad refresher course that some 737-certified pilots took for MAX certification, and—in a last-minute edit—removed from the November 7 emergency airworthiness directive the Federal Aviation Administration had issued two weeks after the Lion Air crash, ostensibly to “remind” pilots of the protocol for responding to a “runaway stabilizer.” Most pilots first heard about MCAS from their unions, which had in turn gotten wind of the software from a supplementary bulletin Boeing sent airlines to accompany the airworthiness directive. Outraged, they took to message boards, and a few called veteran aerospace reporters like The Seattle Times’ Dominic Gates, The Wall Street Journal’s Andy Pasztor, and Sean Broderick at Aviation Week—who in turn interviewed engineers who seemed equally shocked. Other pilots, like Ethiopian Airlines instructor Bernd Kai von Hoesslin, vented to their own corporate management, pleading for more resources to train people on the scary new planes—just weeks before von Hoesslin’s carrier would suffer its own MAX-engineered mass tragedy.

It went without saying that MCAS was an honest mistake, but the secrecy shrouding the program’s very existence told you it wasn’t a 100 percent honest honest mistake. The story of the secrecy begins with the universally beloved, unusually labor-friendly, strangely not-evil Southwest Airlines. (When the carrier’s beloved co-founder Herb Kelleher died in January, Ralph Nader wrote a fawning obituary about the old friend, a “many splendored human being,” who had founded his favorite airline; Nader would soon lose a grandniece to MCAS.) On something of a lark, Boeing had given Kelleher a sweet no-money-down deal on his first four 737s in 1971, and Kelleher repaid the favor by buying more than 1,000 737s over the next 50 years—and zero of any other plane. According to a recent lawsuit against Southwest and Boeing, the airline had rewarded this loyalty with an unwritten but zealously enforced “handshake” agreement, dating back to the 1990s, that Boeing would not sell any planes for less than Southwest was paying, or Boeing would send Southwest a rebate check. And in exchange for that guarantee, Southwest reliably swooped in with big orders and/or accelerated payments after accidents, stock price plunges, or both; the same lawsuit claims that, after September 11, the airline formed an off–balance-sheet slush fund to bail out Boeing during unanticipated shortfalls, and lent other airlines its own planes when Boeing production fell behind, all while it waited patiently for its order deliveries to be filled at a time when it was convenient for Boeing. As the carriers became more profitable in the twenty-first century, more of them followed Southwest’s lead and helped Boeing make its numbers, with United Airlines and Alaska Airlines pitching in during fourth-quarter 2015, alongside Southwest, to make payments not due until 2016. Those partnerships were but one numbers-smoothing mechanism in a diversified tool kit Boeing had assembled over the previous generation for making its complex and volatile business more palatable to Wall Street, and while not entirely kosher and not at all sustainable, they were by far the least destructive tool in the kit—until Southwest called in the favor on its orders for the MAX.

Southwest always had a lot to say about projected modifications to the 737, and Kelleher’s team mostly wanted as few technical modifications as possible. With the MAX, they upped the ante: According to Rick Ludtke, a former Boeing employee, Boeing agreed to rebate Southwest $1 million for every MAX it bought, if the FAA required level-D simulator training for the carrier’s pilots.

To whoever agreed to this, the rebate probably seemed like a predictably quixotic demand of the airline that had quixotically chosen to fly just one plane model, exclusively and eternally, where every other airline flew ten. Simulator training for Southwest’s 9,000 pilots would have been a pain, but hardly ruinous; aviation industry analyst Kit Darby said it would cost about $2,000 a head. It was also unlikely: The FAA had three levels of “differences” training that wouldn’t have necessarily required simulators. But the No Sim Edict would haunt the program; it basically required any change significant enough for designers to worry about to be concealed, suppressed, or relegated to a footnote that would then be redacted from the final version of the MAX. And that was a predicament, because for every other airline buying the MAX, the selling point was a major difference from the last generation of 737: unprecedented fuel efficiency in line with the new Airbus A320neo.

The MAX and the Neo derived their fuel efficiency from the same source: massive . . .

Continue reading.

And let’s not overlook how the GOP’s antipathy toward governmental regulation and regulatory agencies have defunded and weakened the FAA to the point that the FAA couldn’t even do inspections of the plane but had to ask Boeing to do it—a glaring conflict of interest for Boeing. And it killed people. OTOH, the GOP did get its tax cut.

Written by LeisureGuy

18 September 2019 at 3:04 pm

Best medical system in the world: Private Equity Is Working Hard to Keep Surprise Medical Bills High

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A mailer sent to New Hampshire voters telling them how horrible it will be if surprise out-of-network billing is banned. – New York Times

Kevin Drum gives another example of The Best Medical System in the World™ at work:

One of the most outrageous aspects of American health care is surprise out-of-network billing. Most people, if they go to a hospital that’s “in-network,” quite reasonably assume that this means “the hospital’s doctors are in-network.” But that’s not the case. Sometimes hospitals contract with doctors who aren’t part of your insurance network, and these doctors can charge whatever they feel like. Your insurer won’t cover this—that’s what out-of-network means—which means that when you get home you’re likely to be greeted by a $40,000 anesthesiology bill.

This is obviously bad, and both Democrats and President Trump favor legislation to end it. However, there’s one group that thinks out-of-network billing is just fine: the private equity firms that own the medical groups that specialize in out-of-network care.

But this presents a problem: how do you make it sound bad to prohibit surprise out-of-network billing? Hmmm.

Here’s the answer: Attack the ban as “rate setting” by “big insurance companies.” Then add some scary stuff about not being able to see your doctor anymore and “profiting from patients’ pain” and you’re all set. Who wants to involved with anything like that?

But the best part of this particular attack ad comes at the very end: “Put Patients Before Profits.” How Trumpian! The whole point of out-of-network billing is to allow doctors to make lots of money at the expense of their patients. But who cares? You just say the opposite and then get huffy if anyone suggests you’re being a wee bit untruthful.

Out-of-network billing is hardly limited to . . .

Continue reading.

Written by LeisureGuy

17 September 2019 at 1:52 pm

Millions of Americans’ Medical Images and Data Are Available on the Internet. Anyone Can Take a Peek.

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Jack Gillum, Jeff Kao, and Jeff Larson report in ProPublica:

Medical images and health data belonging to millions of Americans, including X-rays, MRIs and CT scans, are sitting unprotected on the internet and available to anyone with basic computer expertise.

The records cover more than 5 million patients in the U.S. and millions more around the world. In some cases, a snoop could use free software programs — or just a typical web browser — to view the images and private data, an investigation by ProPublica and the German broadcaster Bayerischer Rundfunk found.

We identified 187 servers — computers that are used to store and retrieve medical data — in the U.S. that were unprotected by passwords or basic security precautions. The computer systems, from Florida to California, are used in doctors’ offices, medical-imaging centers and mobile X-ray services.

The insecure servers we uncovered add to a growing list of medical records systems that have been compromised in recent years. Unlike some of the more infamous recent security breaches, in which hackers circumvented a company’s cyber defenses, these records were often stored on servers that lacked the security precautions that long ago became standard for businesses and government agencies.

“It’s not even hacking. It’s walking into an open door,” said Jackie Singh, a cybersecurity researcher and chief executive of the consulting firm Spyglass Security. Some medical providers started locking down their systems after we told them of what we had found.

Our review found that the extent of the exposure varies, depending on the health provider and what software they use. For instance, the server of U.S. company MobilexUSA displayed the names of more than a million patients — all by typing in a simple data query. Their dates of birth, doctors and procedures were also included.

Alerted by ProPublica, MobilexUSA tightened its security last week. The company takes mobile X-rays and provides imaging services to nursing homes, rehabilitation hospitals, hospice agencies and prisons. “We promptly mitigated the potential vulnerabilities identified by ProPublica and immediately began an ongoing, thorough investigation,” MobilexUSA’s parent company said in a statement.

Another imaging system, tied to a physician in Los Angeles, allowed anyone on the internet to see his patients’ echocardiograms. (The doctor did not respond to inquiries from ProPublica.)

All told, medical data from more than 16 million scans worldwide was available online, including names, birthdates and, in some cases, Social Security numbers.

Experts say it’s hard to pinpoint who’s to blame for the failure to protect the privacy of medical images. Under U.S. law, health care providers and their business associates are legally accountable for securing the privacy of patient data. Several experts said such exposure of patient data could violate the Health Insurance Portability and Accountability Act, or HIPAA, the 1996 law that requires health care providers to keep Americans’ health data confidential and secure.

Although ProPublica found no evidence that patient data was copied from these systems and published elsewhere, the consequences of unauthorized access to such information could be devastating. “Medical records are one of the most important areas for privacy because they’re so sensitive. Medical knowledge can be used against you in malicious ways: to shame people, to blackmail people,” said Cooper Quintin, a security researcher and senior staff technologist with the Electronic Frontier Foundation, a digital-rights group.

“This is so utterly irresponsible,” he said.

The issue should not be a surprise to medical providers. For years, one expert has tried to warn about the casual handling of personal health data. Oleg Pianykh, the director of medical analytics at Massachusetts General Hospital’s radiology department, said medical imaging software has traditionally been written with the assumption that patients’ data would be secured by the customer’s computer security systems.

But as those networks at hospitals and medical centers became more complex and connected to the internet, the responsibility for security shifted to network administrators who assumed safeguards were in place. “Suddenly, medical security has become a do-it-yourself project,” Pianykh wrote in a 2016 research paper he published in a medical journal.

ProPublica’s investigation built upon findings from Greenbone Networks, a security firm based in Germany that identified problems in at least 52 countries on every inhabited continent. Greenbone’s Dirk Schrader first . . .

Continue reading.

Written by LeisureGuy

17 September 2019 at 8:58 am

Why is Extra Salt Injected into Meat?

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Dr. Michael Greger writes at NutritionFacts.org:

Why is the salt industry so powerful? It has its own PR and lobbying firms to play tobacco industry-style tactics to downplay the dangers of high salt intake, but salt is so cheap. How much money is the industry really making? As I discuss in my video Big Salt: Getting to the Meat of the Matter, it’s not the salt mine barons who’re raking it in—it’s the processed food industry. Indeed, the trillion-dollar processed food industry uses dirt-cheap added salt and sugar to sell us their junk, and, by hooking us on hypersweet and hypersalty foods, our taste buds get so dampened down that natural foods may taste like cardboard. The ripest fruit may not be as sweet as Froot Loops, so we just continue to buy more and more of the processed junk.

There are two other major reasons the food industry adds salt to food. “The other 2 reasons, however, are entirely commercial and for most foods are the real reason the food industry wants the intake of salt to remain high.” If salt is added to meat, it draws in water, so the weight can be increased by about 20 percent. Since meat is often sold by the pound, that’s 20 percent more profit for very little cost.

Salt also makes us thirsty. There’s a reason bars offer free salted peanuts and soda companies own snack food companies. It is not coincidence that Pepsi and Frito-Lay are the same company. Would we shell out nine dollars for a drink at the movies after eating a bucket of unsalted popcorn? Would we supersize our soda if they didn’t salt our fries and Big Mac?

Salt is also added to meat because it solubilizes the muscle proteins into a gel for “optimum” meat texture, which is one of the reasons the meat and fish industries like transglutaminase, the “meat glue” enzyme. Meat glue can help gel the muscle protein without adding salt.

Some of these salt alternatives leave a bitter aftertaste in the meat, but this problem can be managed by adding chemical “bitter blockers…which work by blocking the activation  of [our] taste receptor cells and thereby preventing taste nerve simulation”—that is, the information is stopped from ever reaching our brain.

The meat industry acknowledges that its products contribute a significant amount of dietary sodium, “maligning their own image,” but salt is just so cheap that using anything else would cost the industry money. However,  . . .

Continue reading.

Written by LeisureGuy

17 September 2019 at 8:55 am

Evolution of luxury living in NYC

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Interesting video: an architect takes us on a brief tour of luxury living and how it evolved.

Written by LeisureGuy

16 September 2019 at 11:47 am

What Trump Has Shown Us About Leadership

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James Fallows had an interesting column in the Atlantic a couple of weeks ago, one that I just now happened across:

Whatever is wrong with Donald Trump is getting worse. A week ago, it seemed noteworthy that he was canceling a long-planned state visit because an allied government didn’t want to let him “buy Greenland.”

Now: proposals to stop hurricanes with nuclear bombs; turning a G-7 news conference into a late-night cable infomercial for Trump’s own badly struggling golf resort;  “imaginary-friend” discussions with Chinese leaders that the Chinese say never occurred; orders that his officials “build the wall!” with a promise to pardon them for any laws they break in the process; and general megalomania and craziness.

Last week I argued (in “If Trump Were an Airline Pilot”) that if Trump occupied any other important position in public life, responsible figures would already have removed him from the controls. In this case the “responsible figures” are the Vichy Republicans who control the U.S. Senate, which is why nothing has happened to rein Trump in. Not one of these senators will stand up to Trump, even as he is melting down.

A few days ago, readers with military, corporate, and other backgrounds responded to the proposition that a person like Trump would already have been screened out by corporate, military, medical, or other professional systems. Here’s another round in response to that.


CEOs are worse than you think: In the previous post I quoted a reader who said that a man like Trump was par for the course in big public corporations. (“Many American CEOs are as incompetent as Trump.”) I said, in response, that it would be good to have a few more examples—apart, say, from Elizabeth Holmes of Theranos, who was able to con much of the financial and scientific world for a long time.

This reader wrote back to say: You want examples? I’ve got examples! Here is an abridged version of his reply:

I read your challenge regarding examples of CEOs who have destroyed the company and were not fired by the board for whatever reason in the face of incompetence. First, of course, scholarship:

1. Book that discusses this very same phenomenon, as CEOs are chosen for their ‘charisma’ vs. experience and competence. Searching for a Corporate Savior, The Irrational Quest for Charismatic CEOs  (Rakesh Khurana, Princeton, 2002). In this book there is a discussion about the parameters that boards tend to use for choosing CEOs in the US. I think you’ll find some of your examples there.

2. Examples of incompetent CEOs who destroyed or helped destroy their companies after being put on the job. Don’t take my word for it, try this list of “15 Worst CEOs in American History.” The criteria of the list:

“Those selected for the list fall into one of two simple categories – those who ruined the companies completely while they served as sitting CEOs and those who did severe damage from which their firms could never possibly recover.”…

3. Want more current examples. Sure: Take a look at “Worst CEOs of 2018.” …


We can talk about incompetence in another sense: Are they building a company that works for the world at large, or are they building a company to feed their egos?

You may say, it doesn’t matter if they do, what matters is the result. However, I think you’ll find that, if we begin to discuss the ethics of owning and managing a business, you quickly get to the ‘responsibility’ moment, where your responsibility is to your employees, your environment, your country, and your shareholders. In that order.

The idea that shareholders must always come first has always been ridiculous and only a small mind and small heart could accept that (cue the usual Republican assessments – take your examples from people like Mitch McConnell, a man who does not understand what made the US great and only cares about getting what he wants or what he thinks he wanted when he was 30 years younger.) Take your example as Bezos. Once you have made more money than God, what’s the point of not paying your employees a living wage?…

Hope you are not counting on the genius of American Business leadership to save the country from its own present course.

To reassure the reader on the final point, I’m not looking for a CEO savior. (The main theme of the recent work that I’ve been doing with my wife, Deb Fallows, is that communities need to be their own saviors.) My point was simply: Corporate oversight, however flawed, has seemed to be more effective than what we’re getting at the moment out of the U.S. Senate.

Which leads me to …


Actually, CEOs are way better than you think! A reader whom I’ve known for a long time, and whose work involves corporate governance and CEO-search processes, agrees with the original point, and disagrees with the reader above.

My friend writes:

I’d like to offer a response to the response you received [from the reader quoted above] regarding CEO’s of public companies and the Board’s judgement on their fitness to serve (“The board at a public company would have replaced him outright or arranged a discreet shift out of power.”)…

The responder’s comments are contrary to my personal experience.  For more two decades I was a Senior Partner and the Co-Leader of the [particular business area] Practice at one of the top four international retained executive search firms. My search practice was exclusively focused on C-level executive positions, not infrequently searches for CEO replacement.  In a majority of my executive searches, my client was the Board of Directors.

While the typical CEO search engagement was initiated to replace the planned retirement, often a year or more in advance, I can think of at least half a dozen searches to replace CEOs whose behavior was not only harmful to the business interests of the enterprise, but also offensive to the values of the company.

These were cases of Trump-like behavior.  This could be a painful process for the Board, particularly when the CEO was also a Founder who had overseen the selection of Board Directors over the course of many years.

I can think of four examples of CEO behavior so egregious that the Board recognized its fiduciary duty to shareholders to dismiss and the replace the CEO.  While I won’t name the companies involved, I will say that all were Fortune 100 corporations, two investor-owned systems, a specialty manufacturer, and one of the largest [insurance-related firms].  These executive searches were conducted in strictest confidence, and only the Board was aware that the CEO was to be replaced.  In contrast to your respondent’s characterization of “the medieval level at which corporate management is done,” it was clear to me and my Search Firm that in these instances the Boards acted firmly, ethically, and in the interest not only of shareholders but also of the corporation’s management and employees.


I will acknowledge that there has been a growing tendency for CEOs to recruit compliant Board Directors and undermine their independence, but I will also observe that based on many years’ experience working very closely with many of the most senior healthcare executives that the best CEOs seek strong and independent Directors on their corporate Boards.  The best CEOs of the most successful large public companies use their Directors as an extension and enhancement of management talent, and they defer to their Directors when making certain critical decisions regarding the values of the enterprise and its strategic direction.

Again, in my experience, an effective Board would not long tolerate capricious leadership, and certainly would not hesitate to act to dismiss a CEO whose personal behavior violated ethical standards, even if the enterprise was doing well.

One final note: your respondent asserts, “Many American CEOs are as incompetent as Trump.”  I demur.  With the exception of the occasional Elizabeth Holmes (Theranos), Ken Lay (Enron), or Rick Scott (Columbia HCA) – essentially Founders as well as CEOs – my personal experience and close acquaintance with a fair number of top tier executives and Board Directors is that it takes exceptional intelligence, leadership talent, and steady judgement to lead an organization as complex as a Fortune 100 corporation.


While we’re at it, let’s think more carefully about airline pilots: In the first post I used the commercial-pilot world as an example of highly consequential occupations, with checks and safeguards to thin out incompetents. And, yes, I say this in full awareness of the “Right Stuff”/“Top Gun” macho-egotist mentality among a number of pilots, which I’ve seen plenty of examples of during my own humble-private-pilot exploits over the years.

This reader writes: . . .

Continue reading.

Written by LeisureGuy

16 September 2019 at 10:38 am

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