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Computerworld - LAS VEGAS -- Godfrey Sullivan is approaching his two-year anniversary as CEO of Hyperion Solutions Corp., a business performance management software vendor, following a three-year stint as the company's president and chief operating officer. Yesterday at Hyperion's Solutions 2006 user and partner conference here, Sullivan spoke at length with Computerworld about a range of issues, including his take on Scott McNealy stepping down as Sun Microsystems Inc.'s CEO, former CA Inc. CEO Sanjay Kumar's guilty plea and the H-1B visa controversy.

Godfrey Sullivan, CEO of Hyperion Solutions Corp.

When your predecessor, Jeffrey Rodek, passed the CEO reins to you and assumed the position of executive chairman of the board, he said having separate individuals serve as chairman and CEO is a preferable governance model. How's it working? More and more companies are starting to separate the chairman and CEO roles. It doesn't mean that's the only way to go; there are plenty of companies that do it the other way, and they do fine, too. But from a governance standpoint, it's a pretty good separation. It lessens the chance for the CEO to have the board in his pocket.

It's interesting, in a governance context, that former CA Chairman and CEO Sanjay Kumar today pleaded guilty to the financial fraud charges he had been facing. (See "Kumar pleads guilty in CA fraud case") What's your assessment of that development? I haven't followed that case so closely that I could give you legal merits, but I'll tell you that the interchange I have with our auditors is quite simple in why they feel good about their relationship with Hyperion. I believe that if you set conservative guidance and you follow that, you'll keep people in bounds. When you set growth targets that are too aggressive for your business -- when you live in denial and say, "I wish we were going faster, therefore, I'll just set the bar high and then we'll chase that bar" -- you really force people out onto the ethical edge. They'll do whatever it takes to close a deal; they'll treat a customer the wrong way. Somebody in the day-to-day business will make the wrong decision because they've been pushed to the edge or pushed over the edge.

The No. 1 thing a CEO can do to maintain ethical guardrails and make sure you're doing the right thing for the customer -- which, by default, is the right thing for the shareholders -- is to set conservative guidance and then exceed it.

But what happens when the CEO is the problem? Obviously, you have an ethical dilemma there. The tone comes from the top. If you can't set the expectations for your corporate behavior, you will ultimately fail.