The Way it was: 1998.

Eye on the Next Revolution

Early in World War I, Henry Ford sailed a ship to Europe with a group of influential religious, academic, and business leaders. His intention was to appeal to heads of state across central and western Europe to "get the boys out of the trenches by Christmas." Three weeks later, Ford returned to the United States. "I didn't get much peace," he said, "but I learned that Russia is going to be a great market for tractors."

There is something in the fiber of every business executive that instinctively searches for the next major market, the next big idea, the product breakthrough, or the newest, best way to do business. I see it in every CEO I meet.... Where is the next revolution? The answer is in the reality behind the hype called the Internet. And it is critical for every executive who wants a business to thrive to grasp this reality and harness it before the competition does. IBM calls it e-business.

Samuel Palmisano, SVP and group executive of IBM Global Services, in "There's No Business like E-Business" [Spring 1998]. He was named president of IBM Corp. in August 2000.

The Big Story: Fraud Breaks Out

It has been estimated that fraud costs U.S. organizations more than $400 billion annually. While financial statement fraud has been one of the dominating corporate news stories this year, financial statement schemes have been around forever. What makes today's version of this type of fraud particularly daunting is the proliferation of computer technology and how it figures into the pattern of abuse.

Howard Fielstein, partner in the accounting firm Margolin, Winer & Evens LLP and a certified fraud examiner, in "Detecting Financial Statement Fraud" [Summer 1998].

Bankruptcy -- Straight Ahead

At present, Chapter 11 may be the principal business tool available for the resolution of massive liability problems. These days of easy credit available to fund enormous acquisitions and for other corporate purposes may be a prelude to a host of big corporate bankruptcies such as those filed in recent years, including Johns-Manville, Texaco, A.H. Robins, Eastern Airlines, Continental Air Lines, Federated Department Stores, R.H. Macy's, and LTV Corp., to name a few of the billion-dollar Chapter 11 cases. Corporations and their boards of directors should be ready for new major Chapter 11 cases that could be filed by companies with which they have significant contractual or credit relationships.

Richard Lieb, member of the New York law firm of Kronish, Lieb, Weiner & Hellman, in "Governance During a Chapter 11 Case" [Spring 1998].

Advice on Getting Advice

Any time a board goes outside for advice and perspective there is some degree of threat to management. If the board is too aggressive in this...