The Downfall of CA

The whole escapade reeks of Nixon and the Watergate tapes, for those of you that can remember that far. "What did he know, and when did he know it?" Or better yet, the "I am not a crook" speech that he gave earlier in his career. Now, Kumar hasn't been accused of any wrongdoing, but it almost doesn't matter. This all happened on his watch, and he should have resigned a long time ago when the accounting problems came to light.

What bothers me the most about CA is not that it backdated its sales orders, but that it continues to claim that nothing unusual happened, and that it hasn't come clean. Maybe part of the problem is that this is how CA management ran its business for so long. The behavior is so ingrained into its culture that it can't see the forest for the trees.

One can claim that all businesses play games with how they book their orders. I guess the issue is a matter of degree, and whether the corporate culture is one of gamesmanship or trying to be truthful and reflecting the actual business conditions. It is easy to lie, or at least to reflect something other than the 100 percent truth. For example, a writer submits an invoice for an article he wrote in April for an issue that doesn't get printed until August. Do you record the expense now or in the summer? (We try to match things up with the pub date, but hey, sometimes things change, and you can't always get it right.)

The news reports cite complaints that CA execs have lied even to their own company lawyers. The shame of it all! I guess lying to your customers and shareholders is OK, but when you lie to your lawyers, that really oversteps the boundaries of ethical behavior and good taste. Doesn't anybody have any standards anymore?

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Another issue is keeping Kumar employed at the company. This is most unfortunate. Almost as unfortunate is the choice of his title--chief software architect--a position that evokes Bill Gates' title at Microsoft, which is an interesting comparison. Certainly, Kumar is no Gates. He is a businessman, first and foremost. The man isn't writing any code, let's all agree. It is time to go.

But the other lesson to be learned is that CA's board of directors did the company a disservice: There is no succession plan for life post-Kumar, at least no one that can step up and take the company out of this mess, clean house and assure customers that it won't be business as usual going forward. Contrast this with McDonald's, when its CEO, Jim Cantalupo, unfortunately died of a heart attack on Monday, April 19. The company's board moved quickly and had someone in place by the end of the day. CA will have to search for someone, and as the The New York Times said, "a bulletproof CEO" at that. How about an honest CEO, too, while they are looking? The question is, are there any honest CEOs left these days?

Finally, there is the whole matter of the billion-dollar payday for Kumar and Wang back in 1998. Not only unseemly and noteworthy for its amount, but the fact that this excessive compensation was based on stock performance makes the whole episode just ridiculous. If corporate officers can manipulate their books, why not pay themselves obscenely while they are at it?

All in all, CA needs to get this whole sordid episode behind itself, and show its customers, partner and employees and yes, even its stockholders that it can become honest citizens. I hope its next executive puts in place rewards for truthfulness as part of a compensation plan, and starts to rebuild trust in the entire network.