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Tuesday's discussion



Tuesday's discussion will not specifically address privacy.  Instead, I'd
like to examine the legal, political, and social context of the Internet's
future.  I've selected one reading that I think best addresses these issues.
I doubt many of you will agree with me, so please come prepared to challenge
these ideas.

Why Silicon Valley Should Not Normalize Its Relations With Washington, DC
http://www.cypress.com/press/coverage/ceo/981119.html

The author of this paper, T.J. Rodgers, is CEO of Cypress Semiconductor, a
Silicon Valley chip manufacturer.  Several years ago T.J. earned
considerable press for his public reply (it ran in the Wall Street Journal)
to a nun who criticized the lack of diversity on his Board of Directors.
While not directly related to the issues I hope to cover on Tuesday, it's a
great read and I hope it will kick off a spirited discussion.

James

============================================

In 1996, Cypress received a letter from the Sisters of St. Francis of
Philadelphia. The latter is a religious congregation of approximately 1,000
women and was, at the time the letter was written, the beneficial owner of a
number of Cypress shares. The letter was a form letter, and it carried the
stamped signature of Doris Gormley, OSF.

In the letter, Sister Doris, speaking for the Sisters of St. Francis of
Philadelphia as a Cypress shareholder, expressed the view that a company "is
best represented by a Board of qualified Directors reflecting the equality
of the sexes, races, and ethnic groups." The letter went on to say that it
is the congregation's policy "to withhold authority to vote for nominees of
a Board of Directors that does not include women and minorities."


T.J Rodger's reply is excerpted below:


Dear Sister Gormley:

Thank you for your letter criticizing the lack of racial and gender
diversity of Cypress's Board of Directors. I received the same letter from
you last year. I will reiterate the management arguments opposing your
position. Then I will provide the philosophical basis behind our rejection
of the operating principles espoused in your letter, which we believe to be
not only unsound, but even immoral, by a definition of that term I will
present.

The semiconductor business is a tough one with significant competition from
the Japanese, Taiwanese, and Koreans. There have been more corporate
casualties than survivors. For that reason, our Board of Directors is not a
ceremonial watchdog, but a critical management function. The essential
criteria for Cypress board membership are as follows:

* Experience as a CEO of an important technology company.
* Direct expertise in the semiconductor business based on education and
management experience.
* Direct experience in the management of a company that buys from the
semiconductor industry.

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.) Bluntly stated, a "woman's view" on how to
run our semiconductor company does not help us, unless that woman has an
advanced technical degree and experience as a CEO. I do realize there are
other industries in which the last statement does not hold true. We would
quickly embrace the opportunity to include any woman or minority person who
could help us as a director, because we pursue talent -- and we don't care
in what package that talent comes.

I believe that placing arbitrary racial or gender quotas on corporate boards
is fundamentally wrong. Therefore, not only does Cypress not meet your
requirements for boardroom diversification, but we are unlikely to, because
it is very difficult to find qualified directors, let alone directors that
also meet investors' racial and gender preferences.

The full reprint of both letters is here
http://ei.cs.vt.edu:8000/Fall96/Public/View/cs3604_fall96/Contribution01_je/