Financial Director articles from December 2005

Financial Director archives from December 2005

Editor's letter - A very British victory.(accounting institutes merger)(Editorial)
December 13, 2005... Byline: Andrew Sawers, editor - editor@FinancialDirector.co.uk. In one sense, the ICAEW has pulled off a remarkable achievement. The recent vote on the proposal to merge with the public sector accountants, CIPFA, showed a clear majority in...

On the move - Royal Mail seeks first class FD.
December 13, 2005... Byline: Rachael Singh. The former finance director of Channel 4, Sue Ford, has been appointed group finance director at Ingenious, the media investment and advisory group. Prior to her role at Channel 4 holding company, 4 Ventures, Ford...

Not so sure.
December 13, 2005... Byline: Richard Willsher. The FSA is set to clamp down on the abuse of financial reinsurance arrangements by insurance companies. Could this lead to greater scrutiny of the use by corporates of self-insurance? On 11 October the...

Duty bound.
December 13, 2005... Byline: Sarah Perrin. A new era of company law is on the cards following publication of the company law reform bill, which proposes fundamental changes to corporate life beyond the much reported changes to auditor liability. If the...

Clash of styles. A spirited Finance Directors' Forum on board the P&O ship Aurora saw leading finance directors from across the UK engaging in lively debate. And there was plenty of wine and 'monkey business', too.
December 13, 2005... It was an energetic and intriguing start to the eighth Richmond Events Finance Directors' Forum on 3-6 November, which took place on board the P&O ship Aurora. Tim Smit, visionary founder and chief executive of the Eden Project, launched the...

FDs' success depends on the team.(financial directors)(Brief Article)
December 13, 2005... The increasing demands placed on the CFO and the growing complexity of the role make it increasingly important that the head of the function be supported by the right team. Suzzane Wood, head of the European CFO practice at headhunting firm...

Accounting - Proposal is a contingent liability. The proposed changes to IFRS 3 and IAS 37 will create greater uncertainty, as well as stretching the goodwill of FDs to its limit.
December 13, 2005... Byline: Peter Williams. When the European Commission internal market commissioner Charlie McCreevy recently warned the International Accounting Standards Board about making too many changes too quickly, he would have had accounting for...

POBA seeks clarity.(Professional Oversight Board for Accountancy)(Brief Article)
December 13, 2005... The transparency of accountancy firms is expected to come under scrutiny in the new year when the Professional Oversight Board for Accountancy responds to the effect of the European Union Eighth Directive. The directive will make it a legal...

No change needed.(International Accounting Standards Board proposal)(Brief Article)
December 13, 2005... The ICAEW has criticised the International Accounting Standards Board's proposed changes to accounting for business combinations, saying in a letter to the IASB that it "does not agree with many of the conclusions reached". "The IASB has put...

Corporate governance - Getting a sense of proportion. It's in everyone's interest to blame auditors for corporate failures, but they should not be held responsible for compensation claims.
December 13, 2005... Byline: Robert Bruce. Over the years the quest of auditors for proportionate liability has been portrayed as a selfish one. And it is easy to see why. The largest audit firms do very well out of their work and their partners and staff are...

UK gap.(Brief Article)
December 13, 2005... The UK accountancy profession must recruit a further 50,000 audit staff to meet the demands of new accounting regulations, according to a survey of senior audit professionals by recruitment firm Careers in Audit. The firm surveyed the heads of...

Board talk.(Deloitte & Touche L.L.P. gives training to public company directors)(Brief Article)
December 13, 2005... Big Four firm Deloitte has invested as much as [pounds sterling]10m in a training centre for public company board directors. The Deloitte Academy, which is free of charge, will target executive and non-executive directors whether or not they...

Our royal blunder.
December 13, 2005... In October's Financial Director we mistakenly referred to Graham Hale, head of corporate business at Bank of Scotland Vehicle Finance, as working for Royal Bank of Scotland. The research we quoted was also conducted by Bank of Scotland Vehicle...

IT strategy - Trying something different. Can Sainsbury's sliding fortunes and the decision to end its current IT outsourcing relationship really be just a coincidence?
December 13, 2005... Byline: David Rae. When, at the end of October, Sainsbury's announced that it was bringing its five-year IT outsourcing relationship with Accenture to an end, tongues began to wag. It was, after all, five years before the contract was due...

LSE ups capacity.
December 13, 2005... The London Stock Exchange has spent nearly [pounds sterling]150m over the past five years developing technology to increase its trading capacity six-fold. LSE chief information officer David Lester says the company's technology roadmap supports...

PwC on fraud trail.
December 13, 2005... Electronic records make up 80% of fraud investigation cases according to the forensic technology team at PricewaterhouseCoopers, which analysed the last two years' worth of investigations. The number of cases handled by the firm has tripled in...

Economics - MPC at a crossroads. The Monetary Policy Committee has presided over an unprecedented period of stability. Is that about to change?
December 13, 2005... Byline: Dennis Turner. Since the Bank of England Monetary Policy Committee was formed in 1997, most observers would give it high marks for its policy judgements. GDP growth averaged around 2.75% (a high of 3.8% and a low of 1.7%) between...

High street blues.(Brief Article)
December 13, 2005... The slowdown in the retail sector is threatening to spread across the economy and hit UK business, according to the latest ICAEW/Orange UK Business Confidence Monitor. The BCM recorded its lowest confidence score ever, with a negative score of...

Voca launches pay index.
December 13, 2005... Voca, the electronic payments infrastructure behind BACS, has launched the 'Voca 100' salary index. Using data drawn from the salary payments it processes for a 100-company sample of FTSE-350 businesses, it will produce a monthly index of take...

Cover story - New wave. Creative financing models and government support are needed to kickstart UK efforts in renewable energy technologies. Otherwise we risk missing the boat again.(Cover story)
December 13, 2005... Byline: Anthony Harrington. What is it about this island that makes us great at inventing things and so pitifully bad at exploiting them? The catalogue of British inventions that have made fortunes for other countries makes grim...

Directors' liability - In too deep. Are you safe from legal action? Recent events - not least Equitable Life's court cases and the company law reform bill - have focused attention on the liabilities that company directors can face.
December 13, 2005... Byline: Sarah Perrin. As is well reported, Equitable Life has pursued through the courts both its former auditors, Ernst & Young, and 15 former directors - six executives and nine non-executives (NEDs). The sums involved are terrifying -...

Salary survey - The 2005 FD Salary Survey.
December 13, 2005... We've turned the tables this year. Our ninth annual FD salary survey takes a new twist by running our FTSE-100 and FTSE-250 tables in descending order of earning power. (Don't worry if you want to find a particular company easily: we have an...

Briefing - Takeover directive - UK appoints takeover panel to implement eu bids code.
December 13, 2005... Byline: Neil Hodge. The European Directive on Takeover Bids was agreed by the European Union on 21 April 2004, after almost 20 years of negotiation. It came into force on 20 May 2004 and must be implemented into the national law of each EU...

Briefing - Divorce - Split decision fuels asset fight.
December 13, 2005... Byline: Neil Hodge. Rich entrepreneurs may be more likely to fight for a larger share of assets in divorce settlements following a landmark ruling on Sir Martin Sorrell's marriage break-up, which saw him take the majority share of their...

Financial directions - Companies take long-term view on rewards. The bonus schemes favoured by FTSE-350 companies have swung towards long-term incentive plans as businesses offer rewards that are more tied to performance measured over prolonged periods, rather than short-term gains, writes David Rae.
December 13, 2005... Research conducted by magic circle law firm, Allen & Overy, shows that 66% of FTSE-250 companies surveyed used LTIPs as a way to reward senior executives in 2005, up from 40% in 2004. The research showed that the increase in LTIPs by the...

Financial directions - Cheap Indian labour points to cracks in China.(Brief Article)
December 13, 2005... Companies looking to take advantage of cheaper labour in Asia should look to India rather than China because wage costs are significantly lower, according to a new survey carried out by Mercer Human Resource Consulting. The company...

Financial directions - Foreign investment bolsters UK mergers and acquisitions market.
December 13, 2005... Owners abroad Acquisitions in the UK by foreign companies increased from [pounds sterling]8.8bn in Q2 to [pounds sterling]12.3bn in Q3, according to figures released by National Statistics. The figure, which includes Sabre Holdings'...

Financial directions - World-class value.(Brief Article)
December 13, 2005... World-class procurement organisations generate 133% greater return on their investment in procurement than typical companies, according to research carried out by The Hackett Group. Hackett deems companies that are in the top 25% of their...

Financial directions - Invoices blown away.
December 13, 2005... As much as $40bn worth of invoices were outstanding to businesses affected by Hurricane Katrina, according to a major report by credit-check and information company, Experian. The research found that professional services firms were the worst...

Financial directions - Bleak outlook.(Brief Article)
December 13, 2005... Negative company announcements for Q3 2005 were up by 6% across all sectors, suggesting that harsh trading conditions will continue into the new year. The findings of research commissioned by KPMG found that retail continues to struggle most....

Financial directions - Insolvency increases.(Brief Article)
December 13, 2005... Personal insolvencies increased to an all-time high of 17,562 in Q3 2005. The figures exceeded the "grimmest expectations", according to Grant Thornton, and represented an increase of almost 12% on the previous quarter and 46% on the same...

Financial directions - Financial bites.
December 13, 2005... "When a big, strong German takes a fancy to you, it can induce a state of nervous tension." The Financial Time's Lex column describes Eon's courting of Scottish Power. Financial Times, 11 November 2005. "I have always accepted that the...

Extraordinary items - Has he got awards for you.
December 13, 2005... The Accountancy Age Awards in early November witnessed about 1,000 people cheering on their favourite finance teams, software products and qualified accountants at the profession's annual gong-fest. Ian Hislop (above), the Private Eye editor...

Extraordinary items - Plastered ...(BPB Industries)(Brief Article)
December 13, 2005... The plight of plasterboard manufacturer BPB, currently fending off an attack from French group St Gobain, brings to mind a story from the 1980s. Back then, the board of BPB thought it would be a good idea if they could ask their corporate...

Extraordinary items - Cock and bull stories.(Why Business People Speak Like Idiots)(Brief Article)
December 13, 2005... A great new book written by three ex-Deloitte people, Why Business People Speak Like Idiots, is a marvellous guide to help you obliterate obfuscating jargon and management bull-speak Here's a few examples... Action item Formerly known as...

Extraordinary items - Wise words.(Peter Drucker dies)(Obituary)
December 13, 2005... The recent death of Peter Drucker at the age of 95 robs the world of management of one of its most sensible, insightful sages. Having trawled through obituaries from cities as far apart as Manila and Montreal, we leave you with a few of the...

Decisions - Discrimination - Benefit for all. Many employers risk falling foul of new disability discrimination regulations unless they tailor employee benefits schemes to suit the needs of all workers.
December 13, 2005... Byline: Neil Hodge. Employers will need to take note of new legislation that has either recently become law in the UK, or is set to do so within the next 12 months, as the new rules could affect the way companies calculate employee benefit...

Decisions - Pensions regulator - The referee's own goals. As chief executive of the Pensions Regulator, Tony Hobman has the unenviable task of protecting the new PPF, without creating uncertainty in an already wary market.
December 13, 2005... Byline: Anthony Harrington. The job of an industry regulator is never an easy one and the Pensions Regulator's task is no exception. The Regulator is responsible for protecting the new Pensions Protection Fund (PPF), and it is also...

Decisions - SIPPs - Fine art of SIPPs.(Self invested pension plans)
December 13, 2005... Byline: Anthony Harrington. From fine art to second properties, many people will take advantage of A-Day changes in SIPPs to indulge in more imaginative pensions investments. But are they aware of the potential risks? Tired of the game...

Decisions - Public sector - Debt to society. The [pounds sterling]690bn public sector pensions deficit is an issue that simply will not go away. With the private sector set to pick up the tab, it is one that government cannot afford to ignore.
December 13, 2005... Byline: Anthony Harrington. The government might have hoped to have drawn a line under the row over the disparity between public sector and private sector pensions when it reached agreement with the public sector unions in October....

Decisions - Ageing workforce - Out with the old. With more and more workers reaching retirement age, employers need to start thinking about how they are going to replace the skills and experience these older workers are taking with them.
December 13, 2005... Byline: Richard Willsher. The first batch of people born in the aftermath of World War Two reached 60 this year. From now on more and more people will retire taking with them the skills and knowledge they have built up during their...

Decisions - Help desks - End of the line. Companies need to get a better return on the perceived value of the benefits they are providing for staff. For many, an outsourced support infrastructure to provide investment advice is the solution.
December 13, 2005... Byline: Anthony Harrington. As we move into a world where final salary schemes are increasingly replaced by some form of defined contribution or money purchase scheme, the risk burden is inevitably being shifted from the employer to the...