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A CEO and CSO Who Actually Communicate about Security

Former Sharper Image CEO Richard Thalheimer and his CSO talk about how a close reporting relationship helped them reduce fraud and prioritize risks during their years together.

CSO: You had some great successes on the security front. In 2004, Sharper Image prevented $13 million in merchandise from leaving the company, and chargebacks for Internet and telephone orders were 0.33 percent, which is low for the industry. Do you think those things could have been achieved without the relationship the two of you have?

Williams: No, I don’t. Many people knew of my direct relationship with Richard and knew I had his support and backing, and it carried a lot of weight with my staff. So when I went to enforce a process or procedure, I always got what I needed from them, as far as performance goes.

Thalheimer: My message always was that I supported the security efforts, and I wouldn’t tolerate any manager’s non-responsiveness to those efforts. That message became very clear in our company. If it was important to Joe, it was important to me. As the CEO of Sharper Image for 30 years, I repeatedly gave the message that I was behind our security officer.

CSO: Richard, what did Joe do that you wish every CSO would do?

Thalheimer: He wasn’t afraid to bring anything to my attention. The CEO needs to have the confidence that the CSO is pursuing good choices to prevent as many threats as possible. One of the ways he achieves that confidence is through communication.

CSO: And Joe, what did Richard do that you wish every CEO would do?

Williams: The main thing was that I had an open line to Richard. I knew what not to waste his time with and what to go to him on. That was the key to my success there.

CSO: What do you say to other CSOs who are struggling with their CEO relationship? How can they improve it?

Williams: The obvious one is that some companies tend to want to have the CSO report to someone other than the CEO. I don’t understand why you would ever want to put a filter between the top “police officer” in the company and the president. I would assume if the head of the FBI thought he had a serious problem he could call the President and tell him. The CSO also needs to be involved in more than just the security function. You have to be proactive about fixing problems even if it’s not directly related to your function. That makes you more valuable to the company and to the CEO.

CSO: If you had to choose one thing that helped make your relationship work, what would it be?

Williams: I could be totally honest with Richard about what was going on. It may not have been something he wanted to hear, or liked to hear, but he wanted to know what was going on. And I knew I didn’t have to worry about whether or not to tell him something. There was openness, both ways.

Thalheimer: Joe solves problems; he doesn’t create them. He is someone who can quickly communicate a problem, develop a strategy for solving it, and then carry through with that. That’s an individual characteristic of him, but it was key to what made our relationship work.

Associate Staff Writer Kate Walsh can be reached at kwalsh@cxo.com.