The capitalist system is based on trust, and trust requires that investorsthe people and institutions that supply the system with the capital required to keep it growingtrust the executives who run that system. But lately, investors appear to have lost faith in the accountability of those executives, and the people responsible for verifying their accounts. As I write, the Dow Jones Industrial Average is trading below 8,000 for the first time since the mid-1980s. In the view of Fed Chairman Alan Greenspan, the problem is simple: "infectious greed" and the ethical lapses by leaders of some of the nation's largest corporations.
In this month's issue, we take a CIO's-eye look at the call for more ethical business practices in "The Ethical CIO", a roundtable of CIOs, CFOs and ethicists whom we assembled recently to discuss the role that CIOs and technology play in making business, technology and IT departments more accountable to business partners, customers and shareholders.
This month's case study, "The Enemy Within", explores accountability through an examination of the Pentagon's war on its own stultifying red tape. Writer Elizabeth Wasserman, the former Washington bureau chief for the Industry Standard, looks at Pentagon CIO John Stenbit's push to use some of the spike in defense funding to scrap the Defense Department's more than 6,000 legacy systems and modernize its IT backbone. The goal: to better serve the country in a time of crisis.
The battle of the bulge is also under way at corporations, especially as economic jitters continue to spook consumer confidence. In "Reality Budgeting", writer Russ Banham looks at efforts by some companies to save millions by using new software and technology management techniques to take the fiction out of the traditional corporate budgetand tie spending much more accurately to business strategy and real-time changes in the marketplace.
Throughout, the new realities of today's world clearly give the CIO new and expanded opportunities to make a marknot only on the way companies shape their cultures, but on how accountable those cultures are to stakeholders and to the bottom line.