Greetings,

Enron, World Comm, Martha Stewart, Tyco, Global Crossing, Rite-Aid; the list goes on, but these are the names we see most in the papers and on TV. Once proud companies featured in magazines, the newspapers, and interviewed on talk shows. The giants of corporate America, men and women to be looked up to, admired, even envied, but not now. Now they are being indicted, investigated, examined, and their most intimate business dealings being brought to the light of day, and they are failing the exam.

What happened? The easy answer and probably the most likely one is simply greed. Good old-fashioned greed. When someone asked John D. Rockefeller, a billionaire, how much money was enough, he answered "just a little bit more". Maybe it is that simple, but I don't think so. Sure, greed certainly played it's role. The desire to make more and more money, with the accompanying prestige and power are hard things to resist, but I don't think it is quite that black and white, most things aren't.

First, let me make a quick distinction between those mentioned above and a company like ours. They are all publicly traded. That means that they have sold shares of stock in their company to people like you and me. In other words, we are small percentage owners. All of the owners get to vote for the Board of Directors, who in turns picks the CEO. The CEO in turn picks his staff which consists of Chief Financial Officers, Senior Vice Presidents of various departments or divisions, etc.

Cornerstone is privately held. The people who own the stock are my wife Karen and I. In turn, that means we pick or vote for the Board of Directors. We, naturally, control that Board. The Board has wisely chosen me as CEO, go figure! I have in turn picked people like Tim Clay as the Chief Operating Officer, Ron MacDonald as Senior Vice President Marketing and so on and so forth. You get the picture. Technically, I cannot defraud any of you because you are not owners. I can get greedy and stupid and try to defraud IRS, or mess around with one of our vendors, but that would just wind up hurting me. So there is a fundamental difference in being public or private, and more importantly to you, how we respond to business downturns, upheavals, etc.

I mentioned in my last e-mail that the first half of the year had not been kind to us. I doubt if that actually impacted any of you. I am pleased to say that July picked up quite a bit and August was an excellent month. Whether this means a real turn around or not I am not ready to predict. I will ask each of you to continue to do what I asked you to do last time. Do the best job you can. Pay attention to the details, check the rates, make sure accessorials are collected, monitor those trailer pools, etc. There is an old saying " The Devil is in the details." Trust me, we get nickel and dimed to death over small errors and omissions. I'll give you a clue, since the first of the year, we have had to write off over $436,000.00 in bad debts, uncollectible accessorials, billing errors, the wrong size piece of equipment, the wrong choice of carriers or lanes, inability or refusal to pass on fuel surcharges; the list goes on, but you get the idea. That 436K is made up of a bunch of avoidable circumstances. About the only unavoidable item is an unexpected bankruptcy. So, once again, please tighten up as much as you can. We can have a great second half and still wind up with a mediocre year overall.

Back to my second paragraph, besides the greed, I think people, even the usual moral, ethical, basically honest people can get "caught up" in the moment. We have all done things that we later regretted. As a rule, we are not in the position to affect millions of lives. The corporate leaders of the above mentioned companies were. Don't get me wrong, what may have started out as a seemingly small, temporary bending of the rules to make their company look better escalated into fraud. Should they be punished?, yes. Should they be made to return those huge amounts of money that they took out of the corporations?, yes. Did some of them start out with the intent to defraud?, probably. Is all of this over?, mostly, but not completely.

The next question is whether or not we should become cynical and brand everyone in those positions as greedy, hypocritical bums. (Keep in mind I am talking about the publicly held corporations, not the good guy CEO's of privately held companies like yours truly) No, let's not do that. Many, if not the majority of America's companies donate large sums to charities, hunger relief, education, good health care plans, matching funds on 401K's, not to mention taxes to the Federal Government, the local government, jobs created by building huge corporate headquarters (think FED-EX), employment tax, social security tax; this list does go on and on. While we are not the size of those companies, keep this in mind. They, like us, once you reach a certain level of income, pay out in taxes over 45% of the income they generated. Then think of the taxes each and every employee paid after that. No, companies are certainly not the bad guys. I'll try not to get real political here, but if you really want to know where all of our money goes, well, let me explain it as follows: There's a great line in one of my favorite television shows, The West Wing, it illustrates what I am talking about. President Bartlett (Martin Sheen) asks a rhetorical question of his staff. "While we were spending millions of dollars designing an ink pen that would work in zero gravity, do you know what the Russians did?, they used a pencil."

Wow, rambled on there, I'm either bored, got an agenda, or secretly worried that people will think poorly of me because I have CEO on my business card. Whatever, that was what I was thinking today, so now you know as well.

Have a great day and weekend. Remember all of those whose lives were ended or forever changed on Sept.11. Be thankful for what you have. Remember, only you can control your attitude, and folks, a great attitude is one powerful thing, and I will add this. When we are interviewing for a position, attitude is the first and foremost thing on our mind.

Rick Rodell
President/CEO
Cornerstone Systems
Memphis, Tn.
901.842.1017