Corner Office: Lynn Good of Duke Energy, on Effective Leaders

Q. Were you in leadership roles early on?

A. No, I had a childhood that would be called ordinary. But my parents taught us about responsibility and instilled incredible confidence in us. My father was a World War II Marine who became a high school principal. He always had a heart for students who maybe were underprivileged or had difficulty of some sort. My mother was also a teacher; both had an incredible work ethic. They also told me that I didn’t need to pursue traditional roles.

Other lessons from them?

They demonstrated accountability to me through actions. When I was growing up, we had a widow living next door to us. So the habit was that if we went to the grocery store, we called her first. If we cut our yard, we cut her yard, no questions asked.

When you graduated from college, did you have a clear idea of what you wanted to do?

I went to work in accounting, at Arthur Andersen. At one point it was the crème de la crème. I wanted to work there because it looked like the hardest thing I could find, and I loved being on a steep learning curve. I progressed quickly, and two years out of college I was managing a small team of people.

What did you learn from that experience?

The beauty of it was that we worked together around a table. I could see when someone was frustrated or had a difficult meeting, so I could keep in touch with what was going on. I would typically stay after they left so I could get a gauge of the work they produced, so I had real-time feedback about whether an assignment was working, and I could adjust. The feedback loop was almost immediate, so I had a chance to practice.

Have you heard feedback over the years about your leadership style that caused you to make some adjustments?

I can be incredibly focused, and I can appear impatient. So I’ve learned to slow down, get to know people and provide more context. There’s nothing wrong with getting to the point pretty quickly, but it’s also helpful to give people an opportunity to talk about their work.

You faced a pretty tough task as a new C.E.O. — merging the staffs of Progress Energy and Duke Energy. How did you decide who was going to be on your leadership team, particularly since there were people you already knew from Duke?

There is a comfort level with people you’ve known for a long time — you’ve been in the foxhole with them. But when you bring an organization together, you need to be agnostic about background, and to interview on capabilities and track record. So we went through interviewing processes to pick the best person for each role.

So what questions did you ask? Let’s say you’re interviewing me.

What have been some of your specific responsibilities? What successes have you had? How do you think? I’m looking for creativity. I’m looking for an ability to lead. I’ll ask about failures. What have been some things that have changed you and developed you over time?

What are your best interview questions?

Why do you come to work in the morning? What makes you passionate about what you do? Why did you choose the career that you did? How do you want it to develop over the next five years? What makes you uniquely qualified for this role? I try to engage people around what makes them passionate about what they do, because people who love what they do get after it every day.

Other things?

With people at this level of their career, it’s no longer about whether you are the smartest subject-matter expert in the room. It’s whether you can be effective in leading a diverse team. Can you adapt? As you think about developing people through their careers, you’re looking for that transition from being the smartest person in the room — and caring so much about that — to being the most effective. It’s about how to develop a team. It’s about how to solve something where the solution isn’t obvious. Effectiveness comes from those qualitative things that give you the ability to network, communicate and lead people toward an outcome they can’t see.

What advice would you give to graduating college students?

I’ve had an interesting career in that I was with Andersen when it went out of business. So in my 40s, everything I’d worked for disappeared. That changes you. It causes you to refocus on what’s important. So I’d say: “Be passionate about what you do, but also be passionate about your relationships and family and other things in life. That’s where happiness is. It’s not all about career.”

Did the experience of seeing Arthur Andersen go out of business make you more risk-averse or more tolerant of risk?

Between March 2002 and May 2002, the firm disappeared. It was a crazy time, because I really didn’t have time to think about a career move. I was focused on getting clients and people from Point A to Point B in a way that preserved as many jobs as possible. Later, I had a chance to re-evaluate what I wanted to do.

Risk is an interesting way to think about it, but I would say it refocused me on the importance of family and where happiness comes from. The lesson was that I’m not defined by my career, so I need to be prepared at any time to go or to change careers. There’s a freedom with that. It’s not that you’re disloyal or don’t like what you do or aren’t passionate about what you do, but your asset is you. It’s not who you work for. So is that risk-taking, or just recognizing that a career changes over time and you have to be ready at any point?

Chipping Away at the Smartphone Leaders

Samsung is now more profitable than Apple, according to second-quarter financial results released by Samsung on Friday in Seoul. But while the two rivals have successively one-upped each other with ever sleeker, more technologically sophisticated phones, new competition is stirring.

Already, the combined share of the worldwide smartphone market controlled by Apple and Samsung slipped to 43 percent in the second quarter from 49 percent a year earlier, IDC, a research firm, reported Friday.

Some of the companies that are chipping away at the leaders are familiar names attempting comebacks, like Sony, Nokia and HTC. Others are relative newcomers, like LG of South Korea and Lenovo, ZTE and Huawei of China.

“The story is no longer Apple versus Samsung,” said Bryan Wang, an analyst at Forrester Research. “Going forward, they will both face similar challenges.”

Analysts say buyers are more willing to look at alternatives to Apple or Samsung because the differences among smartphones are becoming less pronounced.

The proportion of phones running Google’s Android operating system keeps growing and technical specifications are converging. Like Samsung’s Galaxy S4, a number of other phones, including Sony’s Xperia Z, also include high-definition, 5-inch screens.

That makes price, where the Chinese smartphone makers have an edge, an increasingly important selling point.

Those challenges were evident in the latest earnings report from Samsung on Friday, when the company said it expected competition in the smartphone business to stiffen in the third quarter, with new models pending from LG and other rivals. “The strong growth streak for the smartphone market is expected to continue in the third quarter, albeit at a slower pace,” the company said in a statement.

Samsung remains a powerhouse, reporting big gains Friday in sales and earnings for its latest quarter. Net income rose 50 percent, to 7.77 trillion won, or $6.96 billion, from 5.19 trillion won a year earlier. Revenue rose to 57.46 trillion won, or $51.6 billion. from 47.6 trillion won.

On Tuesday, Apple posted quarterly net income of $6.9 billion on revenue of $35.3 billion.

Strategy Analytics, a research firm, said Samsung had passed Apple for the first time to become the world’s most profitable maker of mobile handsets. Samsung, which does not break out results for its handset-making business, generated $5.2 billion in quarterly operating profit from the unit, Strategy Analytics estimated, compared with $4.6 billion for Apple.

Samsung had previously pulled ahead of Apple in market share, and its gains continued in the second quarter, when it controlled 30.4 percent of global smartphone shipments, compared with 13.1 percent for Apple, according to IDC.

Samsung has had to work harder than Apple to achieve those gains. Ubiquitous TV ads around the world and big-ticket promotional events like an introductory gala for its flagship model, the Galaxy S4, at Radio City Music Hall have driven up marketing costs. And while the S4 has been selling at a brisk pace, it has fallen short of some analysts’ expectations. Investors have grown accustomed to bigger gains, and the share price of Samsung, like Apple shares, has taken a beating this year.

“In a way, Apple and Samsung have become victims of their own success,” said Pete Cunningham, an analyst at the research firm Canalys. “When these companies report many billions of profits every quarter, it’s hard to say they are doing anything wrong.”

While the old generation of phone makers — Nokia, Motorola, BlackBerry — struggle, together Samsung and Apple still collect more than 90 percent of the profit in smartphones, analysts say. Yet that success has emboldened more companies to try to challenge them.

Individually, none of these companies poses a threat to the top two. Collectively, however, the next three top players showed strong growth over the past year. No. 3 LG’s share of worldwide smartphone sales increased to 5.3 percent from 3.7 percent in the second quarter, according to Strategy Analytics, with No. 4 ZTE rising to 5 percent from 3.7 percent and No. 5 Huawei going to 4.8 percent from 4.2 percent.

IDC had a slightly different ranking, with Lenovo replacing Huawei in the top five and also showing solid growth, to 4.7 percent from 3.1 percent.

As recently as the first quarter of 2011, three Western companies — Apple, Nokia and BlackBerry — topped the IDC list.

The eastward shift reflects the growth of sales in China, which has surpassed the United States to become the biggest smartphone market, and other developing economies. Analysts say much of the growth in coming years will occur among lower-priced smartphones, an area in which Chinese makers are strong and Apple is notably absent.

But both Apple and Samsung face new challenges at the high end of the market, where their dominance has been most pronounced. Sony, for example, has shown renewed strength in Japan, where its Xperia Z has been outselling the iPhone, and Europe, where IDC showed Sony’s market share rising to 10 percent in the first quarter from 6 percent a year earlier.

LG, which said in the last week that its smartphone shipments had more than doubled in the second quarter from a year earlier, to 12.1 million from 5.7 million, clearly has bigger ambitions in the United States. For the introduction of a new flagship model, the company has planned a high-profile event along the lines of Samsung’s Radio City extravaganza, sending out a “save the date” notice to journalists for Aug. 7.

Why are rivals to Samsung and Apple so optimistic? Despite the slowdown in growth that the market leaders have signaled, the business continues to expand. Smartphone shipments worldwide rose 52 percent in the second quarter, to 238 million phones, according to IDC.

“The smartphone market is still a rising tide that’s lifting many ships,” said Kevin Restivo, an analyst at IDC. “Though Samsung and Apple are the dominant players, the market is as fragmented as ever. There is ample opportunity for smartphone vendors with differentiated offerings.”

European Leaders Huddle on Youth Unemployment

PARIS — President François Hollande of France called Tuesday for “urgent action” to tackle alarmingly high rates of youth unemployment across the European Union, saying that mounting disillusionment among the “post-crisis generation” threatened the very future of the European project.

“We need to act quickly,” Mr. Hollande told a gathering of government officials, business leaders and students in Paris. “In this battle, time is the decisive factor.”

Mr. Hollande spoke ahead of a series of meetings between French and German officials this week in preparation for a summit meeting of European leaders at the end of June, where youth unemployment is expected to top the agenda. The subject is also expected to figure prominently at a meeting here Thursday between Mr. Hollande and the German chancellor, Angela Merkel.

Nearly six million people under the age of 25 are unemployed across the European Union — nearly one quarter of the total, according to Eurostat, the Union’s statistical office. Youth jobless rates are now roughly twice the national average in many of the Union’s 27 member states, with the figures reaching as high as 60 percent in countries like Greece and Spain, which have been hard hit by austerity-driven cuts to social services and other benefits.

Economists say the extraordinarily high rates are in part a result of the general economic slump across the region, but are also a consequence of inflexible labor market rules that make entry into the work force particularly difficult for young people.

In recent weeks, German officials have spearheaded a series of bilateral agreements with countries like Spain and Portugal aimed at helping more young people from those countries enter the work force or to receive vocational training. Discussions about a similar agreement with France are continuing, people with knowledge of the talks said.

Those agreements, while still short on details, are being seen as part of a broader blueprint for a pan-European plan to create jobs and apprenticeships for young people across the Union.

Mr. Hollande said Tuesday that the plan would rest on three pillars: easing the access to credit for small and midsize companies; developing new job-training and apprenticeship programs; and increasing the geographic mobility of young people by offering money for language training and moving costs.

Initial financing for the plan would come from a pool of roughly €6 billion, or $7.7 billion, that has already been earmarked for this purpose from the European Investment Bank.

The European youth jobs initiative is expected to be ready in time for a gathering of the Union’s ministers July 3 in Berlin.

Mr. Hollande’s call to action was echoed by other European officials in attendance at the conference, which was held before a packed hall of university students from France’s prestigious Institut d’Études Politiques de Paris, or Sciences Po.

“We have to rescue an entire generation of young people who are scared,” said Enrico Giovannini, Italy’s new labor minister. “We have the best-educated generation and we are putting them on hold. This is not acceptable.”

Joblessness among those aged 15 to 24 in Italy is above 38 percent, according to Eurostat, on par with the rate in Portugal, which has also adopted wrenching changes. Youth unemployment is much lower in Germany and Austria, below 8 percent in both cases, a reflection both of their stronger economies as well as their centuries-old apprenticeship systems, which offer paid vocational training to students while they are still in high school.

Ursula von der Leyen, Germany’s labor minister, emphasized the need to bring to bear the resources of the European Investment Bank, based in Luxembourg, to encourage companies to invest and create jobs.

“Many small and mid-sized companies, which are the backbone of our economies, are ready to deliver, but they need capital,” Ms. von der Leyen said, noting that small firms still faced “exorbitant” interest rates from private-sector banks that remain reluctant to lend. “We want to break this vicious circle,” she said.

Werner Heyer, head of the European Investment Bank, said the deepening youth unemployment crisis, alongside obstacles to cross-border lending within the euro zone, represented the region’s two “megaproblems.” But he cautioned that politicians would be mistaken if they believed that the European bank’s resources alone would be enough to solve the unemployment problem.

“Such expectations of the bank are beyond the horizon,” Mr. Heyer said. “There is no quick fix; there is no grand plan.”

European Union Leaders Meet on Tax Avoidance

It was the first time that Austria, long considered a tax haven for the wealthy, agreed to a deadline for disclosing such information after rebuffing calls for greater transparency for a decade. The country said it expected to reach an agreement in principle on the matter by the end of the year.

That news, at a summit meeting of European leaders here, upstaged a separate but related topic that has dominated headlines this week: tax-reduction strategies by big multinational companies like Apple, which Congressional investigators in Washington say slashed its tax bill by setting up companies in Ireland.

Pressure on Austria has grown more intense as European countries try to curb citizens’ ability to stash money in other jurisdictions, shortchanging their home governments of tax revenue during a time of lean budgets and gaping deficits.

Ferreting out hidden bank accounts has become a cause célèbre in many countries, especially Greece, which has jailed hundreds of people suspected of tax delinquency, including former government officials. In France, Jérôme Cahuzac, a French minister responsible for fighting tax evasion, resigned upon admitting, after weeks of denials, that he had held a secret bank account in Switzerland.

The 27-member union estimates that tax avoidance costs governments there a total of $1.3 trillion a year.

The crackdown on bank secrecy in Europe is also a result of American demands for fuller cross-border sharing of information under the Foreign Account Tax Compliance Act.

“We will act jointly, and I believe we will manage the exchange of data by the end of the year,” the Austrian chancellor, Werner Faymann, said at the meeting here.

Mr. Faymann said it was a “bad day for tax cheats.” But he stressed that Austria’s concessions were contingent on the “negotiations with third countries” like Switzerland. Austrian officials say that without overhauls in those other jurisdictions, financial services industries in the European Union would be at a competitive disadvantage.

The European leaders, who met for four hours on Wednesday, also directed the European Commission to negotiate tougher agreements with five countries: Switzerland, Andorra, San Marino, Monaco and Liechtenstein.

The chances of the other countries agreeing quickly are not great. And bloc officials warned that those countries could turn the tables by asking the union to make changes first, risking a standoff.

But those countries are also being pressed by the United States for details of all accounts held by American taxpayers. Under that pressure, they may decide there is not much point in digging in their heels with the European Union.

Those negotiations might also clear the way for action by Luxembourg, a bloc member that agreed last month to share banking data by January 2015. But it is still awaiting the outcome of talks with the Swiss before deciding whether to expand the information exchange agreement to include investments like trusts and foundations, as Austria has apparently done.

Once discussions with Switzerland are completed, Jean-Claude Juncker, the prime minister of Luxembourg, said his country “would be in a position to decide the extent of the expansion” of the information exchange.

The summit meeting was billed as an opportunity to push ahead with a crackdown on tax avoidance, but it risked being overshadowed by mounting indignation over reports that American companies, including Apple, had sheltered profits in European countries like Ireland.

Findings by Senate investigators in Washington indicated this week that Apple sharply reduced its tax bill in the United States and the rest of the world by recording most of its worldwide income in Ireland and paying low corporate tax rates there.

The findings and subsequent outcry put the Irish prime minister, Enda Kenny, on the defensive even before he arrived here on Wednesday.

“I’d like to repeat that Ireland’s corporate tax rate is statute-based, is very clear and very transparent — and we do not do special deals with any individual companies in regard to that tax rate,” Mr. Kenny said Wednesday afternoon. “Our country has had its stable corporate tax rate for many years, but that’s not the only reason that companies come to Ireland.”

Similar controversies have risen in Britain about the low taxes paid by the British operations of American companies like Google and Starbucks.

The German and French leaders pledged on Wednesday to step up efforts to recover more funds from global companies.

“We will work toward ensuring companies have to pay more where they are based,” Angela Merkel, the German chancellor, said at a news conference after the meeting.

François Hollande, the French president, told a news conference that Europe should unite to combat profit-shifting by large corporations.

“We cannot accept that a certain number of companies can put themselves in situations where they escape paying taxes in ways that are legal today,” Mr. Hollande said. “We must coordinate at a European level, harmonize our rules and come up with strategies to stop this.”

Speaking on Wednesday at the Brussels summit, Prime Minister David Cameron of Britain insisted he was taking a tough line on taxes with major multinationals like Google, after that company was accused on Wednesday by Ed Miliband, the leader of the opposition Labour Party, of going to “extraordinary lengths” to avoid paying tax in Britain.

Mr. Cameron said he had raised the issue with Google’s executive chairman, Eric E. Schmidt. But Mr. Cameron also cautioned against making targets of particular firms. “I don’t think we’re going to solve this if we simply take one company or another company that is registered in Europe, this one in Ireland,” Mr. Cameron said.

Corner Office: Harry Herington of NIC, on Building Trust in Leaders

Q. How does your background as a police officer help you as a C.E.O.?

A. When you’re a police officer and you walk into a situation, you’re in charge.  If you’re not in charge, you’re not going to live, or somebody’s going to get hurt, or something is going to happen. You have to take control. You have to manage the situation instantly.

You’ve got to assess the situation and make the right determination quickly. You learn how to read people instantly, figure out how to manage every aspect of the situation and prioritize. That’s the best M.B.A. I think anybody could ever get. 

I’ve done some undercover work, too, and I’ve done raids. The people going in with you need to trust you, and I need to trust them. That’s one of the first things I learned. Who can you trust, and why can you trust them? Who’s got my back? They don’t have to like you, but if you’re the person going through the door, that person needs to do what you say. They’re going to respect you, because you don’t have trust without respect. I would never exchange that life lesson for anything.

Q. After attending law school, you transitioned into business. Tell me about your leadership approach now.

A. I firmly believe that the No. 1 job I have is to set the culture of the company.  That’s going to drive success. That’s going to drive integrity. That’s going to drive everything about the company. Early on, I started trying to think, how could I create that trust? I’ve got offices in 32 states, and I’m spread from Hawaii to Arkansas to Texas to Maine.  Our all-employee calls are great, but I’m just a voice on a call.

Then a couple of things happened. One was I bought a motorcycle. It wasn’t a midlife crisis. I have a brother who’s three years older than me. Over a period of about three years, he had seven heart attacks. I walked into his hospital room after he was recovering from one of them and said, “What do you want out of life?” 

I came back the next day and he said: “I thought about that all night long. I want to get a motorcycle and ride Route 66.” I said, “Done.” I bought the biggest one I could, a Harley Ultra Classic, law enforcement blue. 

Around that time, we were organizing a big company conference with all of our general managers. So I had 200 employees in Oklahoma City for a marketing conference and I thought, I’ve got this brand new motorcycle. It’s about a six-hour drive from our headquarters near Kansas City. I decided to ride the motorcycle to the conference.

So I pull up and I’ve got all my leathers on. I walk in carrying my helmet and everybody’s dumbfounded. I became the buzz of the conference. The next thing I know, everybody’s out looking at my bike. I had so many fingerprints on it because the employees were just swarming this bike. They thought it was the coolest thing. 

I started riding it to our offices in different states. I’d take everyone to dinner, and they would ask me why I bought the motorcycle, and then we would start talking casually about the company. I thought, “Wow, this is a very comfortable, easy setting.” I started getting phone calls from my general managers in different cities, saying:  “We want you to come visit us on the motorcycle. The employees think this is really cool.” 

So I came up with this concept of “Ask the C.E.O.” I would show up and tell the employees, “Ask me anything you want to ask me.” They were asking me all sorts of personal questions, and it kind of got everybody’s guard down, so they felt more comfortable.

I had expected people to ask me about our five-year strategy. But I started getting questions like: “Where did you go to school?” “Why did you get into law enforcement?” “Why did you leave law enforcement?” “How many kids do you have?” I’m on Facebook a lot, too. So people would say: “I see that you like to wear pink shirts when you play golf. Why?”

I would say, especially early on, 80 percent of the questions were personal and 20 percent were about business.

Q. Why do you think that is?

A. They want to trust the leadership. They want to trust that you’re making the right decisions. And it’s not so much whether you’re making the right decisions as far as strategy. It’s more, can they trust you to come up with the strategy, and to make the right decisions when issues come before you? They want to know the person. They want to trust the person. That was interesting. That really did change my entire perspective. 

Q. What is it about the motorcycle?

A. They know I’m coming from corporate and I’m there to answer questions. When I show up on a motorcycle, a lot of it becomes about the trip, and there’s just something about a motorcycle. There is a rebel aspect. And they can also track me because I have a GPS device on my bike. They know I’m riding to them. 

So they see me in a different light. They see me as human — and not trying to be one of them, and not trying to be something I’m not. That is where I think most managers and leaders struggle. How do you get to the point where they perceive you as human? They want to understand how you think, how you tick. It goes back to the trust thing. 

The one thing I tell C.E.O.s when I meet them is, how do you know your employees trust you? Your employees have to trust you. I never ask them, “Do they trust you?” I’ll say,  “How do you know?” Because if you don’t, you won’t be successful.  More times than not, they say, “I don’t know.” It makes them think.

If you want your employees to follow you, if you want the team to go the right way, they want to trust you’re making the right decisions. But why do they trust you? Because of these visits on my motorcycle, I started to understand what was really going on. They want to understand my thought process, and they want to understand basically the core of who I am. That’s why most of the questions are about my family and about my history.

This interview has been edited and condensed.

DealBook: Deutsche Bank’s Shares Rise as Its Leaders Look Past Financial Crisis

Boris Roessler/DPA, via Agence France-Presse — Getty ImagesJürgen Fitschen, left, and Anshu Jain, co-chiefs of Deutsche Bank of Germany.

4:58 p.m. | Updated FRANKFURT — Shares in Deutsche Bank rose for a second day after the bank sold 2.96 billion euros ($3.87 billion) in new stock on Tuesday to help it bolster the size of its capital reserves.

Deutsche Bank has long faced criticism that its capital buffers, the money that banks set aside to absorb losses in a crisis, were inadequate and that it carried too much risk from derivatives and other volatile investment banking products.

But since taking over last year, Anshu Jain and Jürgen Fitschen, the bank’s co-chief executives, have been hoarding profit and selling assets to raise the proportion of capital to money at risk. Bank officials insisted that the share sale was not done in response to pressure from regulators in Europe or the United States.

“It was our decision,” Mr. Jain said on Tuesday during a conference call with analysts. “There was no gun to the head.”

Still, the move will go a long way toward ending the bank’s reputation as one of Europe’s riskiest and least-capitalized lenders. The new capital will allow it to rank near the top among large European banks in the size of its reserves, rather than near the bottom, and to comfortably meet new regulatory requirements.

The bank also raised more than it aimed for when it first announced the share sale on Monday. Institutional investors paid 32.90 euros a share for the new equity, Deutsche Bank said, a discount to the market price in Frankfurt on Tuesday of 35.03 euros.

Shares of Deutsche Bank, the largest German lender, rose 5 percent in New York trading on Tuesday on expectations that the share sale will clear the way for higher dividend payments, even though an increase in the number of shares lowers each shareholder’s cut of profits.

Mr. Jain and Stefan Krause, the bank’s chief financial officer, portrayed the share issue as a turning point that would set the stage for the bank to focus less on its baggage from the financial crisis and more on growth and profit.

“We could see where a capital raise would bring us to the point where the capital issue was off the table,” Mr. Jain said.

European banks have as a rule taken longer to put the financial crisis behind them than American banks. The European lenders have had to deal with the burden of euro zone debt, but they also faced less pressure from regulators to confront their problems. Lately, though, there have been signs that some of the bigger banks are returning to health.

Investors had other good news to cheer from the bank this week. On Monday, the bank reported that net profit in the first quarter rose nearly 18 percent, to 1.66 billion euros, from 1.41 billion euros in the period a year earlier.

Though revenue rose a modest 2 percent, to 9.4 billion euros, the bank was able to cut costs. Mr. Krause said on the conference call that the bank expected to save about a billion euros over the full year.

Some analysts were still cautious about the bank’s long-term prospects. The bank faces uncertainty over the European economy, which is stuck in recession. It also continues to address an array of legal proceedings that could be costly to resolve.

“Whilst we still see risks from litigation, regulation and the macro environment, the strengthened capital position should put the group in a better position to deal with these challenges going forward,” analysts at Credit Suisse wrote in a note to clients. Credit Suisse upgraded Deutsche Bank shares to neutral, from underperform.

Deutsche Bank also said it would raise an additional 2 billion euros later in the year in the form of so-called hybrid equity, a form of debt that converts to shares in time of crisis and can thus be counted toward capital. The bank is waiting for German regulators to clarify rules for such instruments before it issues them.

Pennsylvania Law Firm Leaders Taking a Tepid View of 2013

A new year does not necessarily mean a new beginning for law firm leaders who are anticipating 2013 looking a lot like the ups and many downs of 2012.

The Media Equation: In 2013, Engineering a Reversal of Fortune for Media Leaders

In business, all years are critical — make a big mistake and you won’t have the chance to make another one. But in the media, wave after wave of transformation mean the coming year is particularly important.

Insurgents are racing over the hills; margins, along with the advertising sales that drove them, are tumbling; and people consume media content at a time, place and, often, at a cost of their choosing. Forget New Year’s resolutions. We’re talking imperatives, a to-do list that requires eating your Wheaties and then some. So on the last day of 2012, it’s worth looking at a group of leaders who confront very steep hills to climb in the year that ends in lucky 13.

LAURA LANG, C.E.O. OF TIME INC.

Hired a year ago from a digital advertising firm to head Time Inc., Time Warner’s magazine behemoth, Ms. Lang was optimistically viewed as an out-of-the-box answer to the knotty problem of making a print company dance in a digital era.

Twelve months later, the honeymoon, if there ever was one, is over. Advertising has quickly gone backward at the publisher, and the nascent efforts in mobile and video Ms. Lang has championed will not fill the crater anytime soon.

Time Inc., an industry leader in print subscriptions, has yet to find a way to wring money from consumers on the Web. Ms. Lang has been slow in articulating a business strategy and building a team to execute it, and at some point, the people who hired her will start checking their watches.

JEFFREY ZUCKER, PRESIDENT OF CNN WORLDWIDE

Of all the people on this list, Mr. Zucker, whose appointment was announced in November, probably has the best chance of showing progress. After all, he will take over a business that makes $600 million, all while doing not much of anything right.

Fixing any one of CNN’s manifest problems — mornings that are not competitive, evening ratings that are deeply embarrassing and a late-night transplant in Piers Morgan who is being rejected by the viewing public — will make him look like a genius.

Most important, to me at least, is that CNN master the Big Story. The network, often useful on breaking international news, has fumbled on signature domestic events including the Newtown school shooting. Call me old-fashioned, but fewer breathless, informationless stand-ups from reporters and more actual reporting may be a good place to start.

MARTHA STEWART, FOUNDER, MARTHA STEWART LIVING OMNIMEDIA

A nice little franchise that overshot after going public, Martha Stewart Living Omnimedia resembles a troubled aircraft that is madly switching pilots while chunks of the plane are flying off.

Big write-downs caused third-quarter losses to exceed total revenue; after all of five months, the chief executive said she would step down; and the company just cut two of its magazines, Whole Living and Everyday Food, as stand-alone products.

Add in the fact that the Hallmark Channel declined to renew the daily “Martha Stewart Show,” and you have a lot less media coming out of a company named Omnimedia. Most of the profits now come from merchandising, but even those are imperiled.

The company signed a deal with J. C. Penney to sell branded Martha Stewart products last year, which was a coup, except that Macy’s accused the company of already selling it those rights and promptly sued. The stock fell to $2.50 a share from over $4.50 at the start of the year. Clearly, it’s going to take more than a few well-placed floral arrangements to make this company look pretty again.

ROBERT THOMSON, C.E.O. OF NEWS CORPORATION

A trusted Rupert Murdoch lieutenant who took over as managing editor of The Wall Street Journal in 2008, Mr. Thomson overcame the skepticism of the staff with an acute eye for news. The result was a more general interest newspaper that was a hit with readers. And now that News Corporation has been split into two divisions, publishing and entertainment, Mr. Thomson will make the leap to the business side and become the chief executive of the publishing unit.

Running those assets without the support of Fox News and “Avatar” will be a challenge, which became clear this month when the company said in a filing that its publishing businesses lost $2.1 billion in the fiscal year that ended June 30. Those losses came largely from $2.8 billion in charges mostly related to closing News of the World in Britain in the wake of the phone-hacking scandal.

The remaining print assets — including newspapers like The Wall Street Journal, The New York Post and The Times of London, and HarperCollins, a book publisher — will be folded in with a number of fast-growing Australian pay-television assets, which should give the newly formed division some financial cushion.

E-mail: carr@nytimes.com;

Twitter: @carr2n

European Leaders Back Common Banking Rules

Sorry, I could not read the content fromt this page.Sorry, I could not read the content fromt this page.

Reed Smith, K&L Gates Double Down on Veteran Leaders

For two very different guys, Reed Smith's Greg Jordan and K&L Gates' Pete Kalis have a lot in common. The two West Virginia natives rose to lead their respective Pittsburgh-based law firms well more than a decade ago and both have recently won unopposed elections to additional terms for the next three and five years, respectively.