Only where a proxy fight is involved and two slates of directors are offered do the shareholders really have an opportunity to cast a meaningful vote on a director. Otherwise they are largely faced with accepting the slate of directors proposed to it by the management, and these are almost always the incumbent directors, for the directors themselves fill any vacancies on the board that occur between shareholders meetings. Therefore it becomes critically important how in any given company the directors are actually selected. Secondly, the most important single act in my opinion that the board of directors performs is the selection of the chief executive officer or his removal if circumstances require it. This in turn underscores the emphasis of the relationship between the board and the chief executive officer. The chief executive officer is critically important because he is entrusted with the management of the ordinary affairs of the company and he and his staff provide the principal analysis and recommendations for the extraordinary items which the board itself must consider. I hold the view that when the board of directors are in fact running the company, the company is or soon will be in trouble. In the best managed companies it is a skillful chief executive officer who leads the company in the direction that it should go, rarely overruled by his board because the recommendations that he brings to it are sound and because he seeks timely guidance from his board and uses their wisdom and experience to keep him from making mistakes and to improve the quality of his own performance. -7-