Hard to see how he could have gotten his company as far

as this knowing so little so I assume he knew everything

and is playing the plausible deniability game either

way I wouldn't buy a Dell if it were the last computer

maker on earth and that goes double for Dell stock.

..when a Captain was responsible for the behaviour of his crew?

If the CEO can claim the credit for his employee's efforts, surely s/he should also be held accountable for the f*k-ups? After all, isn't that why they supposedly are paid "the big bucks"?

Where's the accountability, if the CEOs can simply turn around and say "I didn't know"? What else "don't they know"? Exactly how much of the goings-on of the company are they aware of? "Hmmm; we sell stuff, it costs us money to make it and people pay us money for it... we want the second number to be bigger than the first number" seems to be the limit of the knowledge they seem willing to admit to.

Michael Dell had the reigns only one of the three years in question. also its not uncommon for the CEO to be in the dark about stuff like this, now if he were CFO i'd call bullshit on his statement immediately.

It probably went something like this:

bean counters to chief bean counter, we're falling a little short of our forecasted revenue this quarter!

chief bean counter to bean counters, fudge the numbers a little, we wouldnt want our stock prices to fall, now would we? besides, i want my fat christmas bonus!

chief bean counter to chief figure head, Here are the revenue reports you requested sir, and i'm pleased to say, once again, we've met our forecasted goals. great job sir!

... the Premier of China has announced he has no personal knowledge of human rights violations administered by his government.

I believe the only comment that can really be made in reaction to Mr. Dell's comment is "Duuuuuuuuuh." Seriously, did anyone expect him to say anything different (other than "No comment")? Don't get me wrong, I'm not saying that he did or did not have knowledge of the issue. But if he did, he's certainly not going to admit that he did. Getting off through plausible deniability seems pretty easy for CEOs. To be acquitted, or serve no jail time, after admitting you knew about illegal activity is another matter entirely, especially when it's the SEC you're up against. Ask Bernie Ebbers how much those guys like to fool around.

This is America, Aubry. The word "responsibility", in both personal and corporate contexts, was removed from our vocabulary many years ago. Right around the time the almighty dollar became the most important thing, and quality and workmanship suddenly didn't matter anymore. It's sad if you ask me.

Quote: "Where's the accountability, if the CEOs can simply turn around and say "I didn't know"? What else "don't they know"?"

Michael Dell says he was not involved in or aware of the wrongdoing in the company. Why does this surprise or offend anyone? With a large organisation most of what goes on is not known to the CEO. If every executive fell on his sword each time there was wrongdoing in the company nobody would be left in business. To refer to the "the plausible deniability game" implies Michael Dell is lying which on the facts presented is very far from being shown.

Quite why Mr Donaly is put off Dell computers is not apparent from his post. You might as well refuse to use gas because most of it is produced by Russia, a ruthless state run by an ex-KGB tyrant who suppresses freedom of speech or to buy underwear because it is probably produced by sweated labour in a Third World factory run by a corrupt boss who abuses his workers. I have used Dell PCs and laptops for 9 years and found them reliable. A few years ago I had a problem with the hard disk of a 2 1/2 year old laptop and Dell replaced it free of charge without quibble within 48 hours.

If he didn't know, then he should have. All directors/members are required to sign off on the published accounts and SEC returns. They are responsible - it's almost the definition of 'director'.

Don't blame the bean counters too much. It's not them who get big bonii for sales numbers remember, senior management and the sales team are. So what happens is that they come under enormous pressure to 'massage' the numbers until the targets are hit and the board gets their payoff.

@Knowledge and accountability.

Your first paragraph is ignorant of just about every rule in corporate governance. You sound like an officer of Dell. My advice would be not to try that argument in court or with the SEC.

No - I have no connection to Dell or any competitors.

Quote: "This is America, Aubry. The word "responsibility", in both personal and corporate contexts, was removed from our vocabulary many years ago."

What utter rubbish and worthy only of a bar room rant.

Read Sarbanes-Oxley. If you don't know what it is, don't presume to generalise about corporate responsibility. If you do you will know that US executives are increasingly being held accountable and are altering their conduct in ways intended by the Act. There will always be wrongdoing as long as there are humans but not everyone is irresponsible.

Please don't judge people by your own standards. Don't assume that every boss is a crook with no principles.

No I am not an officer of Dell nor connected other than as a customer and I am not defending bad conduct. I do not have a brief for Michael Dell. However, I object to the knee-jerk reaction that someone "must be lying" because he earns a lot of money. The directors, including Michael Dell, may well have liability but the fact they have to sign off the accounts does not mean they must have known about (or indeed that they ought to have known about) a fraud. Fraudsters usually try to hide their actions as appears to have been the case here.

I doubt that Michael Dell is that concerned by his bonus - he will be more concerned about reputational damage to the company.

The earlier Reg article http://www.theregister.co.uk/2007/08/16/dell_probe_results_released/ states that senior people were sacked and that other changes were made. It is for the authorities to judge if that is sufficient action for the company to take but what evidence do you have that Michael Dell is not telling the truth?

Such statements by Michael Dell are essentially meaningless and unverifiable. Just remember he's the kind of guy who makes a profit out of his fellow students running a business from his dorm room. We've all seen such a wheeler-dealer close to, and we know what they are like.

When earnings were overstated, he was CEO, cashing in options. When he put Rollins in as CEO, and the SEC were investigating (but Dell hadn't published this), these overstatements were mostly reversed out with understatements, and he wasn't cashing any options. Resulting in a negligible nett adjustment from the internal audit.

All entirely innocent, I am sure. But IMO he should certainly adjust his option exercises during the mis-statemnt period to todays price, and compensate the business for the overpayment it made in the huge share buyback that was taking place even as earnings were being overstated.

On the subject of accountability, a CEO is not required to have all knowledge. He may rely on his CFO's advice for validity of the accounts, and legal counsel for legality advice. The Dell CFO is now out of the company, and presumably it is hoped he will take the blame; it's somewhat harder for a CFO to exonerate himself. However, he was kept on during the bulk of the remedial/investigative/coverup phase, which is not high principled conduct by the company. The audit chairman was then slid across to CFO, rather than maintaining his independence. All slightly malodorous, and consistent with the worst possible interpretation. But proving nothing.

It all comes down to what records there are of what was said and done at the time. If the CEO gave instructions like: "I don't care how you do it, but make sure we beat the earnings forecast", or persuaded/threatened staff to execute and conceal false accounting from the CFO, or was advised by the CFO that some accounting transactions were not legal, but overruled that advice, then he goes down.

"Please don't judge people by your own standards. Don't assume that every boss is a crook with no principles."

How about if I judge them by my half-century of observation, some of it "in the trenches" at Intel?

I would say that no more than 97% of senior management in the Fortune 1000 are crooked. No more than 1% are honestly ignorant. The other 2% are dupes.

Increase the first figure for Sales And Marketing management to 99%. Eliminate the honestly ignorant there, and reduce the "dupes" to, at most, 1%.

I swear, El Reg (and many of its commenters) remind me of an old, toothless dog. Can't bite any more but we can still annoy the hell out of everyone by pi$$ing on everything in sight.

I seriously doubt that "Michael Dell, CEO of Dell Computers said Wednesday he was not involved in any of the accounting monkeyshines" but then, El Reg wouldn't get its usual crowd of "anti-everything"s to even read the piece if it simply printed that Michael Dell was not CEO of the company for two of the three years in review.

As to the "He's got to be lying and I hate Dell computers anyway" crowd, jolly good - I'm sorry you had such a miserable experience and that you distrust so much a person you've never met and whose integrity you have no knowledge of whatsoever. I hope your life improves.

"If he didn't know, then he should have. All directors/members are required to sign off on the published accounts and SEC returns. They are responsible - it's almost the definition of 'director'."

You do realize that Dell isn't a small business with a single office right?

I mean, if someone wrote in that they only spent 1000 dollars on office supplies, but actually spent 1200. Would you actually know that the printer they put down as 200 dollars actually costed 400?

If you were brought a report that stated they sold 100 computers for 500 dollars each to x and x company, and it sounds reasonable, would you know that the deal was actually 450 dollars each?

I don't follow Dell that well to know how many PCs, printer, servers, accessories etc.. that they sell each year in how many different locations. But I am sure that one person couldn't know for a fact that every single item on this list was correct without putting some trust in someone else.

The examples you give are all things affecting companies big and small, that are prevented by operational procedures and systems that require unfeasably many corrupt and colluding employees to circumvent. And of course the CEO would only be held accountable for detected lapses if no remedial action were taken.

What is of concern is how entire categories of transactions are treated in the accounts. There are many ways to mislead - e.g. reporting expenses as capital items; moving debts overseas, then off the balance sheet.

Two examples of things accountants do to massage the figures - did you know that if you buy and pay for a Dell computer, the computer is still shown as an asset in Dell's accounts for 3 working days after it is shipped and invoiced? That's $600m of assets most companies wouldn't show. Or maybe a billion if Dell wants it to be at quarter-end. They call this "not recognising the sale until the product reaches the customer". Did you know that in January Dell made an additional multibillion dollar share issue to an overseas subsidiary. They say this does not dilute shareholder value, because the shares are not open-market tradeable. But if I was a banker, wouldn't I sleep more comfortably lending Dell's subsidiary a few billion if I had those certificates lodged?

At one extreme it could be Dell is striving to describe a wonderful company in the best possible light. At the other it's something worse. Wall Street is heavily invested in Dell and can't get out easily. Adverse comments about Dell are rare in the financial press. But notice how first Intel, and now apparently LCD makers are gradually distancing themselves from Dell, despite its huge buying power.

May not mean anything, but then again . . .