Benjamin S. Carson Sr.,
M.D., has been a director
since 1999. Since 1984 he
has been the director of
pediatric neurosurgery at
Johns Hopkins University.
Seated, le ft to right : Jill Ruckelshaus, R ick Liben son, Bill Gates Sr.,
Susan Decker, Dick DiCerchio, Jim Sinegal and Jeff Brotman.
Standing, left to right: Tony James, Richard Galanti, Charlie Munger ,
John Meisenbach, Dan Evans and Ben Carson.
Susan L. Decker,
a director since 2004, is
president of of Yahoo! Inc.,
where she has worked
since 2000. From 1986 to
2000, Decker held several
positions at Donaldson,
Lufkin & Jenrette, including
director of global research.
and much more in line with what their role is—as
the regulatory framework (Sarbanes-Oxley) has
changed and also as public awareness has increased
of the dysfunction that existed previously. In short,
the board’s role is fundamentally to represent the
shareholders rather than to represent the company’s
executive team. Many more function this way today
than in the past.
there’s a much finer degree of attention by board
members for all aspects of their fiduciary duties.
CC: In your decisions, how do you balance what
appears to be best for shareholders with what appears
to be best for the company? Do you sense that the two
are sometimes different?
Daniel J. Evans
has been a director since
2003. From 1983 through
1989, he served as a U.S.
senator for the state of
Washington. From 1965
through 1977, he served as
the state’s governor.
Ben Carson: The role of corporate boards has certainly changed over the last decade, and the problems that occurred at Enron and other businesses
have actually benefited other companies in the
sense that they have caused corporate boards to
become much more vigilant and responsible. The
board of Costco was already vigilant and responsible, so that a lot of changes were not necessary in
this particular case.
Ben Carson: It is sometimes perceived to be true that
what is good for the company is not necessarily good
for the shareholders, and there is no question that
some have been critical of Costco because they feel
that we are too generous to the employees and that,
in fact, some of the profits that go to employees
should instead go to shareholders. This is quite short-sighted, and I believe the Costco board is in harmony
with the idea that if we provide maximum benefits
for consumers and are fair to employees, in the long
run everyone will win. Happy employees are much
more productive and feel ownership for the company, which in the long run reduces the kind of
problems in the company that destroy profitability
and in turn hurt shareholders.
William H. Gates,
a director since 2003, is the
father of Microsoft chairman Bill Gates and co-chair
of the Bill & Melinda Gates
Foundation. A retired attorney, he serves on the board
of regents of the University
of Washington and has
served as trustee, officer
and volunteer for numerous
Bill Gates Sr.: No question that some events in the
business world have raised concerns in the minds of
the investing public that cause them to look to company boards to exercise their authority to prevent
Jill Ruckelshaus: Yes, it certainly has. I think board
members are much more concerned with their
responsibilities. Certainly Sarbanes-Oxley has placed
new reporting obligations on the company and made
the board much more diligent about policy decisions,
about other members who might be asked to join the
board and about the integrity of those people. I think
Susan Decker: Because I view the role of a public company to be to create long-term value for shareholders, I see great alignment between company interests
and shareholder interests. Where there is lack of
alignment, it generally arises based on the time frame
in which this is being judged or from disagreements
on judgments being made.
On the time frame, some shareholders measure
Hamilton E. (Tony) James,
a director since 1988, is the
president of The Blackstone
Group. He was also a director of Credit Suisse First
Boston USA Inc., formerly
Donaldson, Lufkin &
John W. Meisenbach
has been a director of
Costco since its inception.