I am regularly asked to speak on various corporate governance topics.  Perhaps this is not surprising since I have sat on public company boards in the US, Canada, France and England and multiple private company and charitable boards.  Add to this three years of law school, 10+ years practice as a corporate lawyer, and a decidedly nerdy approach to lifelong learning, and no one is awaiting my thoughts on the Taylor Swift/Travis Kelsey romance.

Typically, I get asked to speak about relatively narrow issues such as how a public company board should organize cyber defense oversight, how to run an effective CEO succession, or how to manage board refreshment, diversity and experience.

Today, I want to write about two important principles that should not be incompatible, but all too often are: Governance and Investing.  I firmly believe that robust corporate governance, including exacting board oversight, is a core component of long-term value creation.  However, at many large asset managers, evaluation of board governance and proxy voting are separated from portfolio management and performance measurement.  I, of course, understand the attraction of job specialization as well as the already heavy workload on portfolio managers and analysts, but the best investors understand that governance is not a separate function focused on achieving political goals but rather an intrinsic and vital aspect of investing itself.

Sometimes it is hard to see the economics of the forrest for the governance of the trees. An episode from my years as CEO of Thomson Reuters can serve to illustrate this point.  Thomson Reuters is a Canadian corporation, majority owned by Woodbridge Company, which serves as the holding company for the Thomson family.  In the lead-up to our 2010 Annual Meeting of Shareholders, I received a letter from the head of Corporate Governance at a mid-sized UK asset manager, regretfully informing me that the firm could not vote in favor of our compensation proposals because the firm had a policy of voting against any proposal adopted by a compensation committee that included a non-independent director.

Now, on its face, this policy not only accords with generally accepted governance principles but makes good sense.  However, in the case of Thomson Reuters, the non-independent director in question happened to be the President of Woodbridge, our majority owner. So, think about this for a moment on a purely rational economic basis.  For every $1.00 of compensation the committee agreed to pay management, Woodbridge would (in economic substance) be paying 55 cents.  While it is true that the Woodbridge director was not independent given their large ownership position, this was not an example of a conflict necessitating the exclusion of this non-independent director.

My conclusion would be different if, for example, the Woodbridge director were included on a special committee considering a going-private transaction.  There the conflict would be obvious. The reason I belabor this example is that in my experience there is a huge amount of non-economic, fuzzy thinking on governance matters, and it is too important an aspect of investing to ignore.  Shareholders should be delighted that the majority owner was involved in setting executive pay; their interests are aligned and none of the classic agency problems associated with fragmented ownership are present.

I was so confused by the letter from the UK investor that I called him to politely explain why he should not worry about the Woodbridge director voting on compensation plans, because he, above all other directors, was motivated to limit executive pay to the minimum needed to retain and motivate management — i.e. he had real skin in the game. We proceeded to have a very pleasant conversation about agent vs. principal conflicts and how these translated to the public company context.  All to no avail.  As I have so often heard in my professional life he simply demurred, stating he had enjoyed our exploration of governance principles and their economic bases, but they had a policy against non-independent directors serving on compensation committees.

As Ralph Waldo Emerson wrote, “A foolish consistency is the hobgoblin of little minds.”  Voting policies should be rules of thumb, not strait jackets for the evaluation of proposals that may or may not be in the long-term best interest of the corporation and its shareholders. The separation of proxy voting from portfolio management at large investors should permit the division of labor and greater specialization, not the separation of governance from long-term investment objectives.

I started to write a post about AI that I have been ruminating upon for months, but came to realize that after the heinous attack on October 7, I could not write about something as relatively light-hearted as the dangers of AI without first setting down my thoughts on this slaughter of the innocents.

First, I am already on record in this blog and elsewhere with my opposition to this right-wing Netanyahu government and its judicial “reforms”, West Bank settlements policy and appeasement of the ultra orthodox.  I continue to believe in a two-state solution and also that Bibi has done his utmost to thwart this outcome while pretending that military strength and signals intelligence alone can keep the nation safe indefinitely.  We now know better.

I also believe that Hamas is pure evil and that Israel has every right to defend itself and seek to eradicate these ruthless murderers.  Hamas does not equal Palestine or the long-suffering Palestinian people, and the sooner Hamas can be eliminated from Gaza the better for the longer-term survival and welfare of the Palestinian people.  This will not come without a horrible price to be paid by ordinary Gazans.  During my Reuters years I came to know personally several of our outstanding journalists in Gaza and I am troubled that they and their families are already suffering in this war that they did not ask Hamas to commence.  Unfortunately, like a cancer that has wrapped itself around healthy tissue and redirects the latter’s blood flow to grow more malignant cells, so too Hamas has metastasized throughout schools, mosques, hospitals, and tunnels in Gaza.  This cancer cannot be removed with surgical precision.

Because there will be a continuing heavy price to pay among innocent civilians — on top of the slaughter of 1400+ Israelis as of this writing — there must be a greater goal than pure revenge.  Deterrence of future attacks through an awesome military response is not enough and, in any case, will not provide long-term safety.  A new government could be formed in Gaza, perhaps led with renewed vigor by Abu Mazen and the Palestinian Authority, perhaps in conjunction with the UN and Arab neighbors.  But this too will fail, if Israel does not take concrete steps to support the PA and move towards an eventual two-state solution. The new unity government with Benny Ganz can begin by freezing all new settlement activity in the West Bank and restraining vigilante settlers.  Longer-term, I would like to see a new coalition government that excludes right-wing extremists like Itamar Ben-Gvir and Bezalel Smotrich, abandons the devious judicial reforms, and draws upon the searing war experience Israel is now enduring to further unite the nation. Beyond this I believe Israelis can rely on their properly functioning democracy to convene an independent inquiry to address the shocking intelligence failures, root out corruption in government (including in the Netanyahu family), and ensure that the ultra-orthodox serve as much time in a tank as in temple.

We must never allow Hamas, Hezbollah or the IRGC itself to make us liars when we declare Never Again.

I have many reasons to visit Israel.  Fleeing Nazi persecution a large part of my family found security and prosperity in the land that would become the modern State of Israel. More recently, I am the co-founder of two tech start-ups with major R&D centers in Tel Aviv.  Both personally and through my venture capital fund I have made many investments in Israeli companies.  I have many wonderful friends in the country.  And across the last quarter century of frequent visits, I have met prime ministers, finance ministers, bank governors, military leaders, and a collection of brilliant scientists, educators, bankers, founders and investors too numerous to count.

Covid interrupted my regular visits to Israel; this Netanyahu government has, for now, ended them.

What is at stake is a battle for the soul of the country. Will Israel, despite its shortcomings, continue to be the beacon of liberal democracy and the rule of law in the fractious Middle East or will it enter the long slide toward authoritarianism and corruption?  This existential struggle is being played out against a more global choosing-of-sides between the axis of totalitarianism (Russia, China, Iran, North Korea) and  democracy (fortunately, still too numerous to list). In between lie the strongman states towards which Israel is veering (Hungary, Turkey, Venezuela, Nicaragua).

For those who don’t follow news from Israel closely, the increasingly right-wing Netanyahu coalition government has introduced legislation in the Knesset that would, among other things, give this legislative body the power to overturn decisions of the Israeli Supreme Court by simple majority vote (61 of 120 members).  It bears mention that Israel does not have a constitution and that as a practical matter the prime minister can expect Knesset support of his cabinet’s proposals (since he depends on a Knesset majority to govern).  Historically, the Israeli judiciary has functioned as the only institutional check and balance on a powerful prime minister.  This is why the proposed reforms go to the heart of the democratic system in Israel and effectively eliminate any judicial review of legislative or administrative action.

Other pernicious provisions of the proposed judicial reforms would give the ruling coalition control over the committee responsible for the appointment of judges at all levels of the judiciary and the power to hire or fire the legal counsel formerly free to monitor and institute legal proceedings to oppose administrative and legislative action.  It is no wonder that the Israeli Shekel has fallen to a three-year low against the US Dollar — the rule of law being vital to a strong and stable economy. Major Israeli companies and institutional investors have also begun off-shoring their assets.

There are plenty of other reasons to abhor and oppose the policies of this, the most extremist religious and right-wing cabinet Bibi has organized across his multiple terms as prime minister.  An express policy of limiting the rights of women and the LGBTQ community, a concomitant expansion of the influence of the Haredim (ultra Orthodox) in education and daily life, and a desire to deploy police and security forces without legal review — to name but a few.  However, none set the country on as irreversible path to religious totalitarianism as the proposed judicial “reforms.”

In short, Israel is headed on a course towards becoming Iran.  One day I hope to visit Teheran once the Mullahs and Revolutionary Guards are gone.  Were I religious, I would pray that this Netanyahu government changes course before it turns Israel into its worst existential enemy.  I shall return on that day.

There is a colloquial English expression that if you “pay peanuts you get monkeys.”  While In the United States it is more common to imagine that monkeys prefer bananas, the meaning is not lost over the Atlantic.  Namely, you get what you pay for.

I was reminded of this aphorism this past week in Singapore — a nation I have always admired for both its commitment to government service and its willingness to pay for it.  The Prime Minister of Singapore, Lee Hsien Loong, is paid an annual salary of $2.2 million Singapore Dollars or approximately $1.6m USD. Undoubtedly, a talented and experienced man such as Mr. Lee could earn substantially more in the private world, but his salary combined with the perks of office appear not too far off market to me. Contrast the case of Singapore with the UK, where the new PM, Liz Truss, will be paid £164,080 GBP per year or approximately $180k USD. For comparison, the US President is paid an annual salary of $400k.

I am perfectly aware that even the UK Prime Minister’s salary is far more than the average worker makes over several years and that it is elitist, non-woke and politically treacherous to suggest that these public servants should be paid more; however, my grasp of economics and human motivation drive me to this unpopular position.

While there are many cases of corporate boards and others showering senior executives with greater riches than may necessarily be required to attract and motivate the right talent and while the market for leadership talent is neither efficient nor transparent, nonetheless I firmly believe that if we seek to be governed by high quality leaders we should pay them something closer to market rates.

In economics as in hydraulics, water seeks its level.  If hypothetically we determine that the job of leading a given nation merits a salary of $1m but that there are applicants willing to do the job for $200k or less, there are several possible explanations. First,  and most optimistically, we have found a truly selfless soul willing to make a significant personal sacrifice for the benefit of her fellow citizens.  Second, and, unfortunately, more likely is that we have either hired (elected) an unqualified candidate or attracted a politician who will make up the missing $800k per year through other means.

How does a leader go about recouping his discount to market rates?  At worst, through direct corruption (Hint: think Trump via his hotel in Washington or Baby Doc in Haiti); at best by an implicit investment during his term in office to be recouped in later years through book deals, speeches, etc. (think Clinton, Obama, or Blair).  Alternatively, there is the model of the independently wealthy candidate (think FDR, Bush Sr. and Jr., or Bloomberg); in fact, members of Parliament were unpaid until 1911 in the belief they enjoyedindependent means. There is also the non-financial variant in which the candidate derives equivalent compensation by consuming fame to satisfy his narcissism or access to additional mating opportunities (think Trump, JFK or Clinton again).

The 2009 “expenses scandal” in the UK provides a good example of water seeking its level.  In addition to their then annual salary of £64,766 members of Parliament were entitled to claim the reimbursement of expenses “wholly, exclusively and necessarily incurred for the performance of a member’s parliamentary duties.” Needless to say, the creativity of parliamentarians knew no bounds: Second homes claimed as primary residences, nanny expenses, no-show family-member employees, etc.

I single out the UK experience not because I think it is the worst; to the contrary it is fortunately a country that still can muster appropriate public censure for such corruption.  Rather, I think it is an example that proves my point that Singapore has the better model.

There are differences among people — not their gender or color or religion, but their aptitude,  experience, qualifications for a given job, and commitment.

Better to pay our government leaders transparently something closer to what they could earn in the private markets than to pretend that money doesn’t matter and then be perennially surprised when water finds its level.

I have not posted in many months to this blog that I have been writing for over 15 years. This is for two reasons: First, I have been busy helping to grow two start-ups and a venture fund among other pursuits; and second, I have felt less of a need to add my voice to most of the debates of the day. The US Supreme Court’s decision in Dobbs v. Jackson (overturning the reproductive health protections enjoyed by American women for the last 50 years under the Roe precedent) has rocked me out of my lethargy.

To begin, let me make very clear that I regard a woman’s right to choose whether or not to seek an abortion (or to make other health decisions concerning her own body) to be a fundamental human right that should be the law of the land in the US as it is in most advanced nations across the world. As a matter of US law, I would not have overturned Roe although its constitutional foundation is not the strongest. My basis for support is twofold: First, the deference prior decisions of the Supreme Court are entitled under the doctrine of stare decisis; and second, the argument that a woman’s right to choose is one of the fundamental liberties of all Americans protected under the 14th Amendment to the Constitution.

This is not the place to revisit in depth the legal debate over whether the Constitution protects the rights of American women to choose what happens to their bodies — this endeavor took the Dobbs court 203 pages. However, I have a hard time reading the plain words of the 14th Amendment without concluding that a state that tells a woman she must carry an unwanted pregnancy to term has deprived her of her liberty.  The notion that the word abortion does not occur in the text of the Constitution nor was the procedure available to the founders generation carries little weight with me. I note in this regard that the Second Amendment similarly does not mention AR-15 attack rifles while these same originalist Justices have no trouble striking down state bans on semiautomatic weapons. Some commitment to the sanctity of life!

As much as I believe this Supreme Court did not need to overreach and reverse 50 years of established precedent, I also believe that the entire US judiciary has been put in the unfair position of being asked to decide the most fractious controversies of our day because members of Congress refuse to stand up and be counted. While not as durable as a constitutionally enshrined right, a simple act of Congress signed by the President could guarantee all American women the right to choose, subject to whatever limits these legislators elected to impose (e.g, no abortions during last trimester, etc.). Legislators regularly balance such interests in adopting new laws; courts struggle to reach political compromises in the guise of interpreting the intent of the framers of the Constitution (including the always contentious issue as to whether they intended it to be a living document or a reflection of 18th Century norms).

There is little doubt that the US Supreme Court has been overly politicized by Trump’s selection of three conservative Federalist Society judges. The opportunity to name the latest Justice, Amy Coney Barrett, only arose thanks to the hardball political treachery of the former Senate Majority leader (denying President Obama’s effort to appoint Merrick Garland early during his last year in office and confirming Trump’s appointment of Justice Barrett in the final days of the 2020 campaign). However, the solution to this lies not in further politicizing the Court by packing it with another three liberal Justices while President Biden holds office. Rather the solution is for Congress to do its job and adopt laws favored by those who elected them.

It would be naive to imagine that in this divided nation we can go back to Justices being confirmed by 80%+ majorities. However, it is not naive but merely hopeful to expect that our elected representatives adopt non-misogynist reproductive health laws that are favored by 60 to 70% of Americans.

Section 1 of the 14th Amendment to the US Constitution

“No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”

Tax reform is very much in the air these days.  Proposals to fund President Biden’s ambitious infrastructure plan and related reconciliation bill for “soft” projects include the adoption of a first-time wealth tax on billionaires, elimination of the step-up in basis upon death,  and a proposed minimum corporate tax levy.

 

I believe there is a far simpler and more equitable personal income tax alternative. In short, all individuals would pay the higher of 30% of their Adjusted Gross Income but no less than 20% of their Gross Income (with no tax due below a Gross Income of $50,000 and rates graduating from 10% at $50,000 to 20% at $200,000 and above). There would be no differentiating between Ordinary Income and Capital Gains rates and absolutely no deductions allowed against Gross Income. The 30% levy against Adjusted Gross Income would only apply to individuals with Gross Incomes greater than $500,000. The Alternative Minimum Tax would be eliminated.

 

Since Congress cannot be expected to resist the urge to fiddle with tax policy to benefit its chosen lobbies such as real estate and energy, and since I believe it is important to encourage charitable giving, tax planners (of whom I would hope there would be fewer) would be free to ply their skills in reducing their clients Adjusted Gross Income with all flavors of deductions and credits, but ultimately subject to the rule that no one pays an amount of  tax less than their applicable percentage of Gross Income.

 

Since I claim this proposed tax policy is simple and fair a couple of examples might be helpful.  Imagine Mary, a successful lawyer who makes $2,000,000 per year, has itemized deductions of $100,000 and donates $400,000 to charity.  Mary’s Gross Income is $2,000,000 and her Adjusted Gross Income is $1,500,000.  She would owe $400,000 in income tax at the top 20% rate applicable to Gross Income, but $450,000 at 30% of Adjusted Gross Income (since she exceeds the $500,000 Gross Income threshold).  Mary would pay the higher amount unless she could be encouraged to contribute another $166,667 to her favorite charity, thereby reducing her Adjusted Gross Income to $1,333,333, and her tax payable to $400,000  under either prong of my proposed tax system.

 

Now lets imagine Robert, a successful teacher with a Gross Income of $80,000 per year and  $2000 in charitable deductions. At a graduated tax rate of 12% (the rate applicable to Robert based on where his Gross Income lies from the $50,000 minimum to the $200,000 maximum rate), his income tax payable would be $9,600.  The 30% tax on Adjusted Gross Income would not apply.

 

In practice even my simplified tax proposal would need some bells and whistles. So, for example, I have only described rates and thresholds applicable to individuals, and some adjustments would need to be made to cover couples filing jointly and family-size credits; however, these are well established tax concepts and would not overly complicate the system.  Nor would this personal income tax proposal need to be adopted in isolation.  Reforms to the estate tax regime and efforts to establish a minimum corporate tax could also be adopted.

 

Ever since I studied US Federal Tax in law school I have been shocked by the complexity, volume and questionable policy choices of the Tax Code. While my proposed system is far from perfect and I would welcome comments on how it could be improved, it is progressive, more fair, far simpler to administer, and should enable the average taxpayer to actually prepare his or her own taxes — an ordeal for which even the best law school education and many years practice at a top law firm could not prepare me.

 

 

 

I sat down recently with The Record, the excellent publication of threat intelligence provider Recorded Future, to share the story of how I became interested and involved in cybersecurity and why I co-founded Bluevoyant LLC with Jim Rosenthal. The full interview can be found at The Record

 

When Tom Glocer was serving as a top executive at Reuters, the business news and information provider, cybersecurity was rarely the main story.

But in the roughly ten years since he’s left the firm, the finance sector has been rocked by cyberattacks and internet-enabled bank fraud, including multimillion-dollar nation-state heists and data breaches that have cost CEOs their jobs. Glocer, who has served on the board of directors at Morgan Stanley since 2013, decided to get into the business of cybersecurity in 2017 by launching BlueVoyant with former Morgan Stanley COO Jim Rosenthal. The startup has since added executives and advisors to its ranks including former GCHQ director Robert Hannigan and former Joint Chiefs of Staff chairman Admiral Michael Mullen.

One of the firm’s focuses is on small and mid-sized companies that often lack the budget and expertise for state-of-the-art security tools. These businesses, to which BlueVoyant acts as something akin to a for-hire security operations center, might have data, customers, or technology that makes them an attractive target. The Record caught up with Glocer recently to talk about the company’s long-term plans, how boards are dealing with cybersecurity, and how the finance industry is handling new threats. The conversation below has been lightly edited for clarity.

The Record: I want to start by going back in time to your experience at Reuters—when did you first realize that cybersecurity was going to be such an important issue both in your life and in day-to-day business operations?

Tom Glocer: I had always been enamored of technology and computing in particular since college. But other than writing some early code, which I had the better sense of stopping, I wasn’t in the weeds on it and nor was I Reuters. But we were operating through the ’90s and into the first decade of the 21st century this really large electronic foreign currency dealing system. There were really only two platforms at the time if you were trading foreign currency, which was the first asset class to really go predominantly electronic. Later we also had Instinet, an equities trading platform, and much later Tradeweb, a fixed income trading platform. But we had already noticed things around 2000—my CTO came to me and said we’re getting probed. At the time we had better control of our internet access, because most people on staff could run their job without it and everyone didn’t require ubiquitous immediate access. So we only had openings to the public internet at like three points, and we could see weird stuff being hurled against our proxy servers there.

And that was interesting to me—it was interesting on a technological level, how do you do this? And it was interesting geopolitically as well, who’s doing this? A 400-pound teenager, a nation state, or some shadow in between the two? That was really how it got started, and then to pick up the story at a certain point… towards the end of my Reuters time—I stayed until 2012, but let’s say 2008, when I moved back to U.S. from London to run the combined Thomson Reuters—somebody who worked at the company came to me and said there are a bunch of NSA, CIA types—Mike McConnell, Michael Hayden, Michael Chertoff—who are concerned that Wall Street is not paying enough attention to the threat. Would you be willing to host a series of lunches and dinners in New York or in a couple of cases take a traveling troop down to Fort Meade and we’ll just scare them a bit?

They didn’t share anything that you couldn’t find in The New York Times, but they did it in a way that made you feel like you’re an insider—they’re sharing these incredible secrets, isn’t this cool? It was pretty targeted, it was pre-JPMorgan, pre-Equifax, it was before CEOs had come to learn that you could lose your job if you didn’t pay attention to this.

TR: Looking at the financial sector 10+ years later, the general reputation is that they at least spend more on cybersecurity than other sectors, and are probably more secure. Do you think the intelligence folks who came to you with concerns in 2008 still have the same fears?

TG: I think that’s accurate… I obviously do see what gets done at Morgan Stanley, which is how I came to form BlueVoyant with Jim Rosenthal because he was the COO at Morgan Stanley with operational responsibility for technology, and therefore of cyber. To me, the great question that every director wants to know—whether they’re more technical or less—is am I spending enough money? And then number two is, am I getting bang for the buck?

The first one is hard enough to answer. You can sort of begin to benchmark that. But whether you’re actually spending on the right things and getting value for money and how defended are you… that’s all over the map.

TR: Metrics have become a big discussion among cybersecurity leaders—as a board member, where do you think the industry needs to mature?

TG: I think part of it is a generational thing. I have not sat in on a Facebook security board review, but I would think that an audience like Mark Zuckerberg would be more interested, more receptive, and care a lot about this issue. I’m 61, and my era of CEOs—and this is a terrible generalization—if you mention tech or cyber or even we’re thinking of swapping out PeopleSoft for Workday… the answer you should get is, “That’s incredibly important. These are platform decisions. They’re core to agility and strategy and cost.” But what you often get is, “Oh, you want to talk about plumbing? Let me take you over to this little room with no windows where we’ve got the geeky CIO, because I’m a big swinging CEO and I only deal with strategy and important issues.”

Fortunately, I think that’s changing naturally as this generation of managers has grown up in and around computing. And there’s been enough bad stuff that’s happened—people who’ve really lost their jobs—that even if you’re inclined to do that, you at least have to pay lip service and say that this is a super important issue. Therefore, yes, I think CEOs and boards are paying more attention to metrics, things like the NIST standards that helped at least create a framework.

To me, there are a whole bunch of really interesting governance questions around things like do you need a cyber expert on your board? Well, it doesn’t hurt to have somebody who’s well-versed, but the rest of the directors certainly shouldn’t say, “Great, we’ll let Mikey try the cereal and now we don’t have to care about it.” There is no concept under at least U.S. corporate law that you can expertize one director and therefore the others are off of some liability hook—and nor should there be. But I think in general, people are getting more educated and asking better questions.

I do speak a lot to boards with BlueVoyant and I’m also chairman of this thing called Istari, which is the holding company for Temasek of Singapore’s various cyber investments, including BlueVoyant. And what I tell people is that the questions don’t have to be about API injection scripts or other deep minutia. You can ask the CISO out of the earshot of the CFO: “What was the total budget you put in a request for? What did you end up getting? Are you comfortable where that line was drawn? What are the next three topics that fell out of the budget that actually you must have felt important enough to include in the first place? What do you think about that? What’s your strategy? Do you do it in-house or are you outsourcing it?” A lot of that stuff is not technical and doesn’t need to be.

TR: To follow up on what you were saying earlier about people losing their jobs over cybersecurity failures, are you referring to a specific incident?

TG: I was thinking of Equifax, and I think the CEO of Target also essentially lost his job. Others haven’t, and when I get asked by CEOs what’s the difference, the answer usually ends up being an ex-post review by the board with a whole bunch of experts that they’ve pulled in. And the question is, did our CEO at least take all the reasonable steps? Did we spend roughly as much money? Did they have a process to review this, etc.? And it’s like every other aspect—you get the benefit of the business judgment rule. But the question is, viewed in hindsight, were the efforts you made reasonable under the circumstances of the threats that you were aware of or should be aware of?

TR: It’s interesting how it took until CEOs started losing their jobs for the conversation to shift.

TG: And I think context matters a lot. In the case of Equifax, there’s obviously a huge amount of private consumer data, as there is in, let’s say, the Morgan Stanley private wealth business. You would expect us to take more care to keep that financial information private than say Zoetis, the animal health company that produces flea and tick collars. I’d like to keep that pet health information confidential too, but on a relative basis… If data about the temperature of a cow population ends up in a pastebin site, that doesn’t worry me as much.

Glocer serves on the board of Morgan Stanley. “To me, the great question that every director wants to know—whether they’re more technical or less—is am I spending enough money?”

TR: What is the latest with BlueVoyant? The company raised $83 million in 2019—how big is the company now?

TG: The latest raise was actually in the 2nd quarter of 2020, and I’m pretty sure we haven’t said publicly what it is, but let’s say we’re closer to unicorn status [a $1 billion valuation] than farther away. That was our B round led by Temasek of Singapore, which as an investor is very focused on the security of Singapore Inc.—they’re making a significant financial and energy commitment to the space.

TR: What’s the grand plan for the company?

TG: It’s still early years and we have a lot of growing to do. The history of the company was Jim was retiring from Morgan Stanley, where, as I mentioned, he was the COO. I at the time was chairing a committee of the board called the Operations and Technology Committee, which now we’re seeing more companies follow the idea of a dedicated committee not just to cover cyber—although obviously that as a defensive matter is a large part of the mandate—but also what I think of as the offensive uses of technology. Not cyber offensive techniques as much as are we using everything we should be in machine learning, cloud, etc.

So anyway, Jim was getting ready to retire, I guess in 2017. And I had been babysitting a set of cyber assets and relationships at a friend’s company, K2 Integrity. So we had a dark web capability out of Tel Aviv and we had what’s grown into the BlueVoyant Incident Response Group, which was sort of the former New York FBI cyber unit. Jim wanted to do one more entrepreneurial thing after Morgan Stanley and McKinsey and Lehman, and I said why don’t you take a look at these assets and figure out what part is underserved or where is the opportunity? And what came back was two ideas: One is the third party risk supply chain focus, which is really the most differentiated part of the business. The idea that, take Morgan Stanley as an example, I would never say we’re 100% guaranteed from first party attackers, but you have to be a pretty sophisticated nation state to get in, move laterally and and do damage. Nobody would say impossible. But Morgan Stanley has over 10,000 suppliers and one is vulnerable via the supply chain and the potential there to introduce malware and ransomware. Even if it’s just one key supplier and they’re out of business… If you’re a pharma company and your supplier of active pharmaceutical ingredients is taken out… Everyone’s got these just-in-time supply chains, and that’s also a significant risk of your business.

The other part was, since we believe the right way to do that was not to send out another hundred thousand signals from the supply chain, we thought we should do it on a managed basis to actually help with that load and improve the signal-to-noise ratio— which ultimately I think is the holy grail across cyber.

And so we thought, OK, while it’s a little crazy to start two business lines as a startup, there would be a natural synergy in doing a modern managed service. If we were going to do a managed third party risk for large institutions, why not also do managed service for smaller and mid size businesses who frankly could never spend enough money to protect themselves. I always use the example of the Dime Savings Bank in New York—Morgan Stanley spends hundreds of millions of dollars just on cyber defense and hires fabulous people like Jen Easterly, who’s now leaving to go into government to lead the Cybersecurity and Infrastructure Security Agency. You’re not going to be able to do that if you’re a small or medium sized bank, but nonetheless, you’ve got SWIFT codes, you’ve got electronic payments, etc. I think you’d be an attractive target. What do you do? Do you roll your own, or maybe it makes sense to rely on a third party like us where we can invest once and spread that cost of that sophistication?

So that was the genesis of the company, and more or less the two business lines.

TR: When you talk about supply chain risks, I assume that the SolarWinds attack has been a wake-up call for all sorts of companies. Have you seen a lot of interest there?

TG: It’s interesting, NotPetya had just happened when we were forming the company and I certainly didn’t think it was that esoteric—it was certainly well publicized even in the more general business press. So I was going around basically saying, look, this was contamination via a small Ukrainian tax provider where they managed to weaponize an automatic update of the tax software, it’s a supply chain attack. People recognized it, but somehow it didn’t feel that the penny had dropped, or at least not to us. But now with SolarWinds, it’s unfortunately for society a very good thing for BlueVoyant, because now the penny has dropped.

Maybe the difference in the four or five years is that people were still playing catch up to their own perimeter defense and their own endpoints… They’re not 100% done there either, but now you raise your head above the parapet and start worrying about your periphery.

After the Equifax breach, “CEOs had come to learn that you could lose your job if you didn’t pay attention to [cybersecurity],” Glocer said.

TR: How would you characterize the companies that have come to you in the wake of SolarWinds? Are they both big and small, or are they in certain sectors? Have you gotten a lot of interest from government-related organizations?

TG: It’s definitely the largest ones, in part because it takes a fair amount of work to do it properly. You need to identify all of the suppliers—that’s not too difficult, most well-organized companies can pull that out of their billing systems or procurement. But then to get that signal-to-noise ratio right, you need to accurately footprint the attack surface of the supply chain, and you’re looking a lot from the outside. We’ve invested a lot in the tools to take an outside-in view of the supply chain and then work with those companies and say, “Look, your rating is an 83, let us help you get up to a 90 because that’s what your purchaser expects you to be.”

And then, yes, government especially now with the change of administrations and the really terrible revelations of just how broad the penetration is—not just SolarWinds, but the Microsoft Exchange situation as well—they’re for the first time realizing we can’t do this all out of the NSA. It’s very nice that we’ve secured the .mil infrastructure, hopefully. But the government is very reliant on .com for everything from logistics to projection of force. And we’ve got really good ongoing discussions about rolling out the capability for government.

TR: SolarWinds also showed that hackers are looking at attacking their targets through the side door, which makes managed service providers especially vulnerable. I’m curious how your company, which falls into this category, deals with this risk and stays protected?

TG: It’s a very good question. We certainly live by the adage that people who live in glass houses shouldn’t throw stones. We use our own technology and data on ourselves. We have a first-class CISO. And we do that famous trade-off between security and convenience. It’s a royal pain in the ass trying to log into BlueVoyant… we do all the things we tell our customers to do. We don’t have the arrogance to believe that we can’t be penetrated, but if we were it would require a high level of sophistication.

TR: When you’re thinking about new technologies or practices down the road, what is catching your interest?

TG: I’m thinking a lot about the increasing dependence in all of our businesses and our personal lives on technology. I hear stories about people who have old-fashioned mechanical typewriters because they don’t want to create a digital record. I think a lot about central bank digital currencies, including crypto, because there seems to be a whole lot of momentum—appropriately—to moving the world’s cash systems to a digital currency. And just based on the experience of the last 10 years, if the Bank of Bangladesh had a digital currency rather than just moving some money via SWIFT out of their Fed account, how much worse would it be? And what happens if the ledgers are somehow able to be tampered with? You don’t have to necessarily steal actual currency, it would be enough that if everyone’s ledgers or enough ledgers were off by a penny and you couldn’t balance the amounts of assets and liabilities, I think the world would run into an instant bank run panic. And those are things that folks at the Fed and the Bank of England worry about, and rightly so. In the U.S. right now, there’s this whole popular theme of the Chinese outpacing us to go to a digital Yuan. Nonetheless, this is an area where you want to be really, really careful. And our experience with places like the OPM and other parts of the federal government don’t give a lot of confidence that we’d be able to protect it at the moment.

TR: Cryptocurrency has gotten a lot of blame for the rise in ransomware attacks over the last few years—it will be interesting to see how governments deal with that as they try to role out digital currencies.

TG: In many respects, the current regimes on things like know your customer and anti-money laundering are diametrically opposed to the foundational principles of blockchain and bitcoin, right? If it’s supposed to be a decentralized end node authentication system and you actually don’t know the identity of the endpoints, you therefore have to reintroduce as an aftermarket retrofit the machinery of know your customer on a framework and an architecture that was built precisely not to allow you to do that.

When I look at the deeper future, I think we will live in a world where it will be too important not to know identity on what we call the internet. The Chinese already do. Their digital currency—they’re not running on a free ledger system there. They will know exactly who’s transferring to whom. So one is the end of anonymity. The other is that the internet that we built on the back of 13 or so trusted institutions, where Harvard trusted MIT, which trusted Stanford… that’s got to be replaced by something that’s secure down to the chip level. But I think the cost will be too high to continue to run this pretend Wild West, which actually is vulnerable.

Unfortunately for all of us as world citizens, cybersecurity is an amazing growing market. Maybe there will come a day when all of this ends up being concentrated in only three firms. But I think more likely than not, there are probably 500 firms around the world that can each make a major contribution to keeping us safer and grow really substantial billion-dollar businesses. And it’s nice to be in that phase of industry.

 

This week I had the pleasure of giving a talk to The Reuters Society — an alumni club of sorts for my favorite news organization.  As I explain in these remarks my loud opposition to  Donald Trump in my post Reuters years would have been inconsistent with the values of  Reuters Editorial that I adopted and proudly defended during my years as CEO.

 

I made many friends in my 19 years in Reuters Group PLC (and its successor company Thomson Reuters Corp.); learned a great deal and greatly enjoyed the company culture which, to me, mixed principled journalism and a global outlook with an affinity for technology and a commercial edge.

 

One aspect I very much took to heart during my time as chief executive was never to publicly express my own political views.  While this might not have been strictly necessary given the separation of church and state at Reuters, nonetheless I felt it was important as people might not make the fine distinction that the CEO was speaking in his personal capacity and not as a representative of Reuters Editorial.

 

This was trying at times such as during the aftermath of 9/11 when I had to explain to the then head of Reuters America why he needed to take down the American flag then  displayed on the large electronic billboard atop the building because statelessness was important to our independence and there should be other ways in which we could express our support for the people of NY.  As one wiser head counseled me: “How would we like it if Saddam ordered the Baghdad bureau to fly the Iraqi flag.”

 

So, given this history and my own actual disinclination to politics, I largely stayed out of the political debate until riled and offended into action by one Donald J. Trump.  Can there be a more execrable human being on the face of this earth?  For me, Trump was the antithesis of every admirable quality I seek in fellow men – intelligence, tolerance, worldliness, respect for history, science, the truth and hard work.  I need not go on to list all his miserable traits.

 

This was not a new aversion for me.  I had grown up in New York and seen his racism, misogyny and buffoonery up close.  What I truly resented was the way in which he routinely stiffed hundreds of contractors, carpenters and artisans on their bills and then counter-sued them if they dared try to collect.  Bankrupting five companies only represented his economic violence writ large.

 

This perhaps explains why I not only publicly and financially supported Hilary five years ago (although she was far from the ideal candidate), but why I kept it up on my blog, on Twitter and elsewhere for five years

 

So, this finally brings me to my topic today, how American business has found its political voice in these last few weeks.  Talk about burying the lede!

 

While there have been some notable exceptions, American business largely either welcomed or at least tolerated the first three Trump years.  Yes, there were some noble voices like Ken Frazier, the brilliant African American CEO of Merck, who resigned from one of the presidents councils in the wake of his racist both-sides-ism concerning the Charlottesville mob; however, in general CEOs stayed mum and welcomed the corporate tax breaks and deregulatory agenda.

 

That began to change in the lead up to the election and changed for good once Trump told the Big Lie: That he had actually won the presidential election, and won it in a landslide, for that matter. Trump and his loyal henchmen like Rudy Giuliani and the Fox So-Called News anchors roused the Republican base to “Stop the Steal” and launched over 60 frivolous lawsuits to challenge perceived fraud and irregularities in elections in the key swing states of Arizona, Georgia, Michigan, Pennsylvania and Wisconsin.  Not a single one of these courts, including those recently stuffed with conservative Trump-appointed judges, found there was any cause to overturn the results.  After multiple recounts and audits, Trump’s own consigliere, William Barr, declared there was no fraud and Chris Krebs, the well-respected Director of the government’s Cybersecurity and Infrastructure Security Agency (or CISA),  declared it the “most secure” election ever.

 

None of this, however, would deter President Pinocchio.  As the days ticked down toward Congressional certification of the election results, Trump and team grew more desperate and CEOs, timidly at first, and then more bravely began to add their voices to the journalists, academics and former government officials warning about a threat to American democracy.

 

One such effort was led by Professor Jeffrey Sonnenfeld of Yale School of Management, who enlisted me to help rally the troops.  In a series of Zoom meetings straddling the January 6 insurrection at the Capitol, 40 to 50 prominent current and retired CEOs found their voices.  There were parallel efforts by the Business Roundtable and National Association of Manufactures, among others.

 

As any of the journalists on this video will know, CEOs are notoriously shy to get dragged into what they perceive to be partisan politics.  This is not crazy.  We don’t want to offend employees with different politics, we don’t want to piss off customers and we are afraid of government retribution.  Others like me might have an editorial justification for keeping quiet; still others just feel that they should stick to business issues and not grandstand on the political stage.

 

My argument to the reticent executives was that Trump’s threat to the rule of law and outright incitement to violence went way beyond the confines of normal politics and had, in fact, become a core business issue.  To wit: Respect for the rule of law was not some abstract civics notion — it was the very foundation of a market economy.  Businesses rely on the enforcement of contract and property rights, the predictability and stability of judicial review and enforcement, and the peaceful transition of power.  The United States benefits greatly from the reserve currency status of the dollar, but this is not some aspect of so-called American Exceptionalism destined to be maintained for all time.  Rather, it rests on the strength of the American economy and the pillars of a constitutional democracy. There is a reason so many businesses are organized and listed on US and UK stock exchanges – even Russian oligarchs know this is where you set up shop if you want to avoid the kleptocrats.

 

Thus, I argued it was incumbent on all of us to raise our voices, but public virtue-signaling was not enough. Davos-like speeches and proclamations have their place, but we needed to hit the political opportunists who were enabling Trump in the only place they cared about — their campaign wallets.  So, many of us committed personally and pledged to encourage our companies to no longer contribute to the political campaigns of any of the 140-plus Congressmen who opposed certifying the clear election results.  Cynical opportunists such as Ted Cruz and Josh Hawley were singled out.  These elite products of Harvard Yale and Oxford, were not just Tea Party yahoos — they knew better, but reasoned they had a free option to pick up the Trump base for their presidential bid aspirations at no cost to them.  They knew that the challenge to certification of the election results would fail to pass the Democratic-controlled House, and likely the Senate as well, so there would be no cost to these opportunists.  We swore to impose such a cost.

 

So if this is beginning to sound like some adoring elegy to the CEO class —apologies. I believe we did the absolute bare minimum that responsible leadership requires and that many of us waited far too long to reach this decision.  However, with trust in media and government at all time historical lows according to the influential Edelman Trust Barometer, all members of civil society need to raise their voices.

 

As Ben Franklin is rumored to have replied to an attendee of the Constitutional Convention who asked what form of government was contemplated, a monarchy or a republic. Dr. Franklin famously replied: “A republic – if you can keep it.”

 

There is some doubt as to whether Franklin actually spoke these words, but there is no doubt after the failed Trump experiment that Americans, even the CEOs among us, have learned this lesson.

 

I was recently interviewed by Bluevoyant LLC, the cyber defense company I co-founded and chair, on my predictions for the post-COVID business world.  While it remains premature to proclaim the end of COVID, with novel vaccines now well on their way to market, I hazard the following.

 

This year, COVID-19 has disrupted businesses and global economies in extraordinary ways. Add to this a highly controversial US Election and Brexit, whereby the UK could leave the EU without a deal, and you can start to see how organizations have been forced to consider a different type of future. Here, former CEO of Thomson Reuters and BlueVoyant Executive Chairman, Tom Glocer, provides his view on the business outlook and trends challenging boards in 2021.

 

Prediction/trend 1 – Lack of resilience in supply chains

There are a conjoined set of issues around the vulnerabilities of our supply chain that COVID-19 has unmasked. The primary one is around the active ingredients in vaccines and pharmaceutical drugs; many of whcih have been single-sourced from China or India. But the issues extend beyond the pharmaceutical industry and are far larger, for example, in the tech world, the Apple supply chain has also been affected — many components are manufactured in China.  Likewise, components for batteries and rare earth minerals are being sourced from both friendly and unfriendly places.

 

Going forward, there will be multiple years of effort to either repatriate supply chains or at the very least, a requirement to make them more durable. This is a move towards anti-globalization. The current model works from a cost efficiency standpoint. However, this may not be the case moving forward, whereby we will likely see a deterioration in the level of just-in-time integration of supply chains.

 

Prediction/trend 2 – Real estate and travel will change indefinitely

Real estate and travel have arguably been the two sectors most impacted by COVID-19. When we have some return to normality, will we go back to flying again with the regularity that we did before the pandemic? Likewise, will we go back to offices operating in the same way and what sort of offices will these be? With remote/home working resulting in a distributed employee base, this presents a subsequently larger cyber attack surface. Employees using their own devices on home networks will continue to be a challenge for organizations. In certain sectors, such as financial services, organizations have home devices completely locked down but the average commercial/industrial enterprise doesn’t have such a disciplined remote set up and therefore we will continue to see adversaries using ‘Bring Your Own Device’ (BYOD) as an attack vector.

But how many offices will close down? And if we reduce travel what impact will this have on airlines and the travel industry as a whole? The nature of the work we perform in offices and at home will change. People will go to work to collaborate. Therefore, solo work in an individual office is likely to reduce significantly. In fact, solo working will only be undertaken in the office if the employee cannot work from home.

The sight of an office-based employee wearing headphones to aid concentration will therefore become more rare — if you need to isolate to work effectively and have the space at home you will work at home.  As a result, we will see an evolution in the type of spaces required with more conference and meeting rooms, and open collaborative work areas. This will force employees to be more deliberate about scheduling their activities.

 

Prediction/trend 3 – A recession was inevitable

In terms of spending and investment, even if organizations cut back in 2021, enterprises will still see the depreciation flow-through some of the big investments that they committed to in 2018-20.  However, at the start of 2020 organizations were getting nervous that we were coming to the end of the ‘bull market’ and they had started to trim. But you can’t bring CAPEX to a screaming halt; instead organizations will delay their spend as long as possible.

That said, we will continue to see investment and movement to the cloud, with organizations making their infrastructure as agile and marginal cost oriented as possible. Organizations will try to be very nimble in their spend as they deploy.

 

Predictions/trend 4 – A focus on rightsizing the business for the future

I sit on three public and five private boards so as you can imagine the challenges being discussed around the boardroom table do vary quite a bit depending on industry and size. One of the companies I work with is an  advertising agency holding company. Firstly, the digital shift has impacted their business and secondly, the COVID-19 pandemic has been a huge shock with their clients’ marketing budgets being cut back. This has led to fluctuations in spend, with clients cutting back and then re-investing again.

Therefore, how do you right-size your business and infrastructure in that environment of uncertainty? Certainly, here in the US, the banks have been doing incredibly well, especially the investment banks. Another company whose board I sit on is a large pharmaceutical. The big question they are facing is how fast can we get COVID-19 therapeutics and vaccines out while still meeting the demand for all the other drugs? And if you abstract this challenge and layer it onto other industries, boards will be thinking about how they keep driving forward to meet existing demand, without knowing what that demand will be and not having a fully-secure supply chain.

Prediction/trend 5 – Growth in the gig economy

Whether there will be a consumer recession and an onset of credit problems or not will depend, in part, on government action and stimulus packages. How many people will end up being out of work?

With so many people potentially out of work, will we see an explosion in the gig economy and platforms like Fiverr, SpareHire and Gigster.  I’m not just talking about Uber or food delivery and so on, but more business-oriented platforms. Many people who either can’t find work or prefer to work for themselves will be driving demand for these solutions. This will lead to an evolution of business models with employers sourcing from the gig economy. But how do you build a set of services like banking, insurance, and healthcare for this industry? This brings into focus a number of issues around trust and payments. For example, how do you deliver services for a client in Turkey if they want to pay you in Turkish Lira?

 

Prediction/Trend 6 – Acceleration of digital transformation business plans

Owing to the pandemic, we’ve seen three to five-year digital transformation plans being squeezed into three to five-months. Many businesses are scrambling to get their heads around what has happened whereby five years of technological transformation has happened in mere months. And, while there is certainly a perception that we have seen enormous transformation, I believe this is because the penny has only just dropped with the older generation that we can do things differently – and that may even mean ‘better’. When I was CEO at Thomson Reuters, I always felt there was a real divide between the digital natives and digital immigrants. So, I think digital transformation initiatives have been held back by a bunch of 50 and 60-year olds who weren’t convinced, who didn’t even know how to schedule their own Zoom meetings. Now suddenly, through adversity, they realize they can do this and it is actually a better way of working – they are digital immigtrants!

 

Prediction/Trend 7 – Diversity, ethics, ESG and sustainability

In the US, the Black Lives Matter movement has reset responsibilities and priorities. However, one of the challenges for public boards is how do you take these issues, and those such as environmental, social and governance (ESG) issues beyond virtue signaling to reality? Do you write letters to your whole business ecosystem saying, ‘we expect everyone to adhere to this policy’? How do you police your whole supply chain and ensure they are procuring ethically and responsibly? It is significantly harder to make the substantive change, than to sign off the press release or marketing campaign.

 

Movements and initiatives such as ESG will only resonate when boards start to financially account for climate change. For example, this will occur when board executives can monetize the true cost of climate change. Up to now it has really only been insurers who have recognized these costs as a result of payment on claims such as those resulting from the Californian and Australian wildfires.

 

Under the auspices of the former Governor of the Bank of England, Mark Carney, the Sustainability Accounting Standards Board (SASB) championed a great initiative around sustainability accounting for companies. However, in a couple of years’ time all reporting companies will squeal and the PWCs and Deloittes of this world will have a field day as they implement all the accounting and control mechanisms to allow this to happen.

 

Prediction/Trend 8 – US Election and Biden – A steady period of normalization

In January 2021, we will see a new administration in the White House, leading to a normalization of the US Government. There will be three likely Biden effects: 1.) a divided government with a Republican-controlled Senate, 2.) a short-term stimulus plan; and  3.) a focus on rebuilding government institutions and relationships with traditional allies. With a Senate still likely controlled by the Republicans, true radical change in healthcare or tax policy is unlikely to go through under the Biden administration.

 

Therefore, we will enter a period of ‘steady as she goes’, which can be good for the markets for a while. We don’t need to do anything radical but stabilize and unite. However, in the long-term – on big issues such as climate change, inequalities in society – the Biden administration won’t be able to make sizable changes, as the government institutions are in gridlock.

 

Prediction/Trend 9 – Brexit is good for some Nation-states

Brexit is such a gift to the Russians. It takes the UK out of the bloc, as one of its strongest members, and weakens Germany; it makes the EU tip more towards the southern countries. I believe there is a golden thread that links Trumpism in the US, and Brexit. It has been remarkable how much damage has been done.

 

Prediction/Trend 10 – A shift from vendors to trusted advisors

Here at BlueVoyant, we are in the cyber defense business which will (unfortunately for society) remain a growth industry for a long time.

 

There is currently a real trend of boardrooms becoming much more involved in cyber, treating it as an existential  risk. But boards are now asking core questions – “How much spend is enough? For years my CISO has been telling me I need firewalls, endpoint, agents, etc.” but now most CEO and CFOs want to know “How much am I spending relative to my peers, and how do I benchmark?”

Whether you lose your job after a cyber attack stems largely from whether you did everything reasonable to prevent such an attack or were you delinquent in your duties. This is why boards want to benchmark against their peers. They want to know whether they are spending enough, and in the right areas, enabling them to get a good “bang for the buck”. Those are the key questions in every boardroom.

As many businesses have shifted to the cloud and continue on their migration journey, this has put the spotlight on managed services. As boards and senior executives think through that spend question, they will also be asking whether it makes sense to do it in-house, or whether there is a better way to share and defray the cost of proper defense? If I am one of the main clearinghouse banks i.e. Barclays or Lloyds, I will have a sophisticated set of infrastructures and I can afford the best talent as advisors and heads in my security division. But if I am a tier 2 bank or a building society I can’t spend £100 million on cyber, I can’t afford to pay top money for senior security staff, but I still have SWIFT codes, payment services, and customer data which, if breached, could  destroy the business’ reputation. Therefore, how do I get Lloyds-quality defense but at a price and in a manner I can afford? Here is where BlueVoyant can really help.

Ultimately, this will shift power away from vendors in favor of trusted experts and advisors. That trend is real, and the future is already here. But everyone won’t come to that conclusion at once. It will take time.

 

Almost four years ago I wrote a hopeful but quixotic post addressed to the president-elect calling on him to listen to his better angels (if any exist) and pivot from his divisive campaign rhetoric to a more mature, inclusive approach to governing.  Needless to say my words fell on not just deaf ears but a completely closed and uneducated mind.  Readers can draw their own conclusions but I would not give my persuasive powers high marks.

 

 

Dear Donald,

I am writing you this letter because I love our country and, despite your hateful rhetoric, I suspect that you do as well. Since I doubt you do much reading other than fanzines about yourself, I don’t expect you to read this or the many other unflattering (but true) posts I’ve written about you in this blog over the past four years. Nonetheless, I hope that others closer to you will convey the recommendations (really, the hopes) I set forth below.

Listen to your better angels.

Set yourself the goal of competing with the Obamas in dignity, grace and inclusion.

Disavow the racists who celebrate your victory with hate speech and waving Confederate flags.

Surprise us all with kindness, compassion and inclusiveness.

Eschew the has-been loyalists and fanners of the flames of prejudice who campaigned with you by appointing the best and the brightest to advise you. Listen to them patiently and seek out those who will speak truth to power now that your office confers it upon you and you need not bully others to obtain it.

Appoint a Muslim and a Mexican-American to high office. Better yet, make sure they are feminists.  Appoint the best qualified jurist to the vacant Scalia seat on the Supreme Court.  Since you tend to pack your teams with family members you might even consider choosing your elder (and better behaved) sister, Judge Maryanne Trump Barry.

Focus your boundless energies on attacking the entrenched bureaucracy of Washington – the kudzu of rules and agencies that strangle good governance. You can start by merging the SEC, CFTC and CFPB into a single agency that balances investor protection with vibrant and fair capital markets.

Don’t tamper with the independence of the Federal Reserve, but follow through on your proposals to use the fiscal policy of infrastructure investment (as I’ve been arguing for years in this blog) to relieve the burden that the Fed and other central banks around the world have had to carry with monetary policy alone.

Revamp the tax code to make it simpler, shorter and more fair: reduce the corporate tax rate to be more in line with the economies around the world with which we compete; move to a territorial system of corporate taxation and encourage the repatriation of foreign source income; increase the earned income credit for poorer families to provide a basic income to those who work less skilled/lower paying jobs; abolish the preferential treatment of carried interest; abolish the AMT but make all individuals (yourself included) pay at least 20% of their income and gains.

Protect the environment. If you really don’t believe the science of global warming, ask your son Baron – most 5^th Graders who attend Columbia Grammar in NYC know more than their parents about climate change.

On healthcare, rebrand Obamacare Trumpcare if you prefer and fix the insurance/payment provisions that don’t work,  but leave in place the protections that actually benefit the folks who elected you such as coverage for those who had no health insurance and the prohibition on denying coverage based on prior conditions. 

Don’t underestimate the value the US receives from the “Pax Americana.” Yes, the United States bears a disproportionate share of the cost of defending freedom and democracy around the world, but we benefit greatly from free trade, open shipping lanes and the reserve currency status of the US Dollar. Respect international treaties and don’t encourage further nuclear proliferation.

Keep a cool head; don’t let others bait you; keep off Twitter, you now have a very big megaphone.

Oh, and don’t build that silly wall.