I'm pleased to represent Dell and our colleagues around the globe here today.

About 100 years ago, the great American humorist Mark Twain said, "Always do right; this will gratify some people and astonish the rest." Skepticism about people and their motives, which is at the root of that quote, has been around for a long time and that skepticism flourishes today, fueled by seemingly nonstop media attention devoted to recent business scandals.

As AEI's own research shows, business, and business leaders in particular, have never enjoyed much prestige in the public eye. Does that mean we should simply shrug off this perceived lack of integrity as an inevitable part of life? In my view, we should not.

The public's lack of faith in us may not be a new problem, but it's an important problem. Moreover, the antidote for the cynicism that exists is not more cynicism. Today, businesses of every type grapple with a range of competitive issues, but perhaps the most significant obstacle we must overcome is the skepticism of our customers and our employees, our shareholders and the public at large. They question our motivation, our integrity, our interest in the public good. Simply put, we are not trusted to do the right thing.

I hasten to add that the perceived lack of integrity is not confined to business. Today, many of our grandest institutions from government to religion and sports are suffering a crisis of confidence. The absence of faith has led to apathy, to people exercising their right not to participate and simply opting out of the system. Nowhere is this more evident than in politics. As an election year, 2004 ought to be a yearlong recognition of the duties and the privileges we share as citizens of this country. Instead, many in our country see politics as a ruthless competition among powerful interests, most of which bear little or no resemblance to the public interest.

That may or may not be a fair representation of how the system works, but I think it's a fair assessment of how it's perceived. The end product of that perception, not surprisingly, results in apathy.

Four years ago, in the closest presidential election ever, and in which one could argue every vote counted more than ever, fewer than half of those eligible to vote bothered to show up. That's a tragedy.

To be sure, a passive, jaded citizenry is not what our country's founding fathers had in mind. Their notion that political power properly resides in the people, not in a monarch or an elite few, presumes that people will exercise the power that's given them.

The power in a company also resides in the people who go to work every day and are clear about their objectives and are committed to achieving them in the right way. The real success of a company like Dell doesn't lie solely in the leaders who certify the financial results, but relies on the people who do the work to make everyday judgments about what's right and what's not.

Our goals for our country and our companies will go unfulfilled if we don't demonstrate integrity at every level and earn the trust of our many stakeholders. Customers must trust that we'll deliver what we promise, that our technology is about substance not about hype, that our products will make their lives simpler and better. Shareholders must trust that the data we share reflects reality and that we are running the business with their interests in mind. And our employees must trust that we're the company with a solid future, that we want their futures to be just as bright as the company's, that the work they do is important and that their leadership team is acting with integrity and expects them to do the same.

Even the most casual observer is aware of the harm that can befall a company and its people when these trusts are violated. And yet, corporate ethics programs, whose mission seems to me ought to be the preservation of that trust, often come across as lip service or window dressing and as something that's tacked on or reactive rather than something that is integral to the business and to its culture.

Now, this is a problem not just for individual enterprises but for everybody. Confidence in leading companies like Dell either supports or undermines confidence in the economy and in the market, and confidence or the lack thereof can be a self-fulfilling prophecy. Witness the retreat of small investors following the burst of the tech bubble and the subsequent accounting scandals. It's been a hard slog regaining the trust of those investors and I believe that trust remains a fragile one. Those of us in positions of leadership must leave no room for doubt when it comes to the integrity of our financial reporting or business practices generally.

Now, Sarbanes-Oxley was an acknowledgment that something needed to be done to restore the confidence of investors and the public at large. You may debate its merits, and we are doing that today. Some will say it goes too far, some will say it falls short and some will say that it's about right. In my view, that debate, while interesting and useful, may be moot. At the end of the day, those of us who were clean to begin with will pay a bit more now to prove it, which while not ideal or fair is probably an investment we're going to have to make. And those determined to cheat will have to work a bit harder to do so and will suffer the consequences, and for government's role in enforcement we're all very thankful.

But the fact is you can't legislate ethics. Birds fly, fish are going to swim and some people are going to cheat. Legislation can't possibly cover every scenario devised by creative cheaters. So what's the answer? Raising the stakes is certainly part of the answer, shining a brighter light on a company's practices and making it harder, and more expensive, to doing the wrong thing.

But speaking as a representative of just one company, the issues that consume me are the ones that I can do something about, which is how to ensure that our actions at Dell consistently demonstrate ethics and integrity to the people and institutions whose trust we depend upon. It starts with a business model that is transparent to everyone, our customers, our employees, our shareholders and even our competitors. The Dell direct model is an elegantly simple way of doing business that provides constant feedback from all of our stakeholders, from the chat room to the boardroom. That kind of feedback isn't for the faint of heart. It's the good, it's the bad and it's the ugly, every single day, every single minute. There's no place to hide and there's no one else to blame when things go wrong.

Our customers and even our employees have other choices in the marketplace and ways to let their voice be heard. Our Board of Directors has always been an independent and unwavering voice on behalf of shareholders. The direct model provides the feedback and our success or our failure hinges on how well we listen to that feedback.

The next step is creating a corporate culture of accountability and responsibility. At Dell, being customer direct means that we're accountable to our customers and to each other every day and at every stage of their experience with our systems.

Culture is important because our team is made up of adults whose ethics were often set long before they got to us. What we can do, however, is establish our expectations and strengthen their resolve as well as their commitment to do the right things. We can appeal to the better angels of their nature and if that appeal falls on deaf ears, we can recognize that it's time to say goodbye.

As business leaders we've spent too much energy focusing on compliance, on meeting our minimal obligations as defined by the law. Our time would be better spent, in my view, developing a fuller picture of who we are, what values define us and how we can instill those values into the fabric of our organizations and by replacing blame with responsibility. That may sound grandiose and even a bit idealistic, but at Dell we've been working very hard over the past several years to make what we call "winning with integrity" a very real, very concrete part of who we are, to make our people see and embrace the linkages between our fundamental values, business ethics and their success.

Dell turns 20 this year, and for the past couple of years we've devoted a lot of time and thought to the transition we're going through, from what you might call adolescence to adulthood. We've done a lot of soul searching about where we've been, who we've become and what we want to be as we grow up. We're proud of the democratizing effect our direct business model has had on the world of technology as we make more technology more affordable for more people around the world. Democratized, standards-based innovation, which we are helping to fuel, supports the growth that moves us ever closer to the efficient, effective economy we all want. The more people we're able to empower with technology, the more muscle we can throw behind the ideas and the imagination of our citizens, the better the chance of meeting the challenges in front of us.

Realizing our potential as individuals, as a company, as a society, requires passionate engagement from everyone, but passion must also be balanced by maturity. And among other things, maturity means having a clear, explicit and well-articulated set of beliefs.

At Dell we have a set of ideas and principles we want our company to stand for and we've put those ideas and principles down on paper into something we call the "Soul of Dell". The Soul of Dell defines the kind of company we aspire to be. It's a statement to the world that says this is what we stand for and this is the standard by which our actions should be judged.

We've boiled the Soul of Dell down to some fundamental concepts, things like trust, integrity, honesty, judgment, respect, responsibility and courage. Most of these speak for themselves but I'd like to talk a little bit about courage, because while we cannot create ethical people, as leaders we have a role to play in giving our colleagues the courage it takes to exercise their own ethical responsibilities on behalf of the company and our shareholders.

Confucius said it well a long time ago: "To see what is right and not do it is want of courage". How often have all of us come upon a different choice of paths, the difficult and the possibly righteous path or the easier and possibly ethically dubious path? In business it's often not just your own code of ethics you must factor in, but also that of your organization.

We believe there is a right and a wrong and there is a best answer, but it often takes courage to do the right thing. What we have tried to do at Dell is give our people the courage they need to make the correct choices. We have done this by demonstrating that our ethics commitment is serious and that we collectively agree to do what is right, first.

Finally, after a transparent business model and a culture of accountability there have to be processes in place that empower people to do the right thing and to take action when they see something wrong being done. We've established a global ethics council, which reports to our Board of Directors, to define and advocate our policies worldwide. It's chaired by our chief ethics officer and I'm a member of that council. Every region throughout our global operations has its own regional ethics committee, which report to the council and places its policies into effect. The council is a true global representation of our business.

Our standards for appropriate and ethical behavior are clearly laid out in the Dell code of conduct, including what we call our "Higher Standard". We train every Dell employee on the elements of the Dell code of conduct. Last year that meant over 44,000 employees in 11 languages. And every new hire gets the training as well.

We also have a global ethics hotline, a whistleblower line if you will, which provides an anonymous way for employees to report incidents, and it is administered by an independent company outside of Dell. Through our twice-yearly Tell Dell survey, employees have the opportunity to provide confidential feedback on the ethical behavior of their leaders and those results are reflected in compensation.

Finally, we have an Office of the Ombuds, which offers employees a comfortable way to resolve workrelated issues, including those involving ethics, through a confidential, anonymous and informal system.

All of these processes and initiatives are important and they give all of our people a way to exercise the courage they need to always do the right thing. Unfortunately, some people are going to cut ethical corners, and for those folks we also have a simple, easy to understand policy regarding their behavior: One strike and you're out. No ambiguity, no equivocation. Ultimately, what's lacking in some people is not the courage to do the right thing, but the fear of what will happen to them if they do the wrong thing. As leaders of the company, our job is to give them both the carrot and the stick.

Now, I want to emphasize that our commitment goes way beyond compliance. In fact, we hold ourselves to this higher standard, a standard beyond the rule of law. Solzhenitsyn said at a 1978 Harvard commencement, "I've lived my life in a society where there was no rule of law and that's a terrible existence, but a society where the rule of law is the only standard of ethical behavior is equally bad." What that means to me is if we merely aspire to a legal standard of moral excellence we'll have missed the point. We can and should do better.

A fair question to ask is how this dedication to a higher standard exhibits itself within a very competitive company. It's important to understand that none of this dulls our competitive edge. We're committed to winning and, in fact, feel an ethical imperative to compete as hard as we can on behalf of our shareholders, customers and employees. We idealistically believe it is a better way to operate and will enhance our ability to win and to attract the best people. The notion of winning with integrity rests on the fact that ethical conduct and winning in the marketplace and in the stock market should and usually do go hand in hand, particularly in this era of heightened security.

Part of the genius of an open, free market system is that integrity pays. The way eBay operates is a great example. In this open, online bazaar sellers are ranked by buyers according to how well they deliver what they promised. Sellers with consistently superior scores do much better so there's an intense pressure to follow through and to live up to your end of the bargain. We need only to look at Fortune's annual rankings of the most admired companies, a list we're very proud to be on, to find examples of companies doing quite well while living up to a higher set of ethical standards.

Scandals and corporate malfeasance have been bad for all business. But amid the wreckage, I believe there's an opportunity for those companies with a track record of ethical, principled behavior to differentiate themselves from the pack. Because in the end customers, employees and shareholders all gravitate toward companies with stable leadership, credibility and integrity, and what Thomas Jefferson called "an aristocracy of talent and virtue."

To be sure, numbers that reflect the truth are important. Numbers are the scorecard, the measuring stick that tells the world how we're doing. We all work in a world of numbers. In fact, at Dell we pride ourselves on being a data-driven, analytic company. But we also recognize that there's an important aspect of leadership that goes beyond the numerically measurable. There is an intangible, inspirational, aspirational element to our jobs. We need to fight on all fronts, in business, in politics, everywhere to erase the cynicism and the apathy that undermines both the free market economy and our democracy.

To be worthy of leadership we must do more than complain about the few bad apples ruining it for the rest of us and seek someone to blame; we must embrace greater transparency and accountability, for no other reason than it will shine the light on the vast majority of us who are trying to do things the right way.

There's plenty of skepticism in the world today and that, in and of itself, is not always a bad thing. But my hope is we can balance a healthy skepticism and a reliance on compliance with an increased dose of idealism and responsibility for all stakeholders.

Customers, employees, shareholders--citizens, neighbors, voters, everybody--we want something better to believe in. Those of us fortunate enough to be placed in positions of influence have the ability and the duty to give it to them. Immanuel Kant once said, "Morality is not the doctrine of how to be happy, but how to be worthy of happiness." In much the same way, principled, ethical leadership does not guarantee success although I believe it helps. Rather, it ensures that we'll be worthy of success once we've achieved it. And that’s my wish for Dell, for myself, for our nation and for all of you. Thank you very much and I'd be pleased to take some questions.

Kevin B. Rollins is the president and COO of Dell, Inc. and a member of AEI's Board of Trustees.