CFO, The Magazine for Senior Financial Executives articles from December 2003

CFO, The Magazine for Senior Financial Executives archives from December 2003

Whose life is it, anyway? Companies, congress, and customers slug it out over some very personal information.(techwatch)
December 1, 2003... LIKE MOST VIRTUAL RETAILERS, Guess.com--the online outfit of clothier Guess Inc.--proudly displays its privacy policy right on the Website. Six months ago, the pledge read: "This site has security measures in place to protect the loss, misuse,...

Analyze this.(IT Portfolio Management)
December 1, 2003... IN THE EARLY 1950s, Harry Markowitz began formulating his groundbreaking theories on modern portfolio management. Applying the concepts of variance and co-variance, Markowitz showed that a diversified portfolio of financial assets tan be...

Lights! Camera! Action! Buying Universal puts GE in the movie business. Its plan for synergies might make a good screenplay.(new deals)(General Electric Co. buys Vivendi Universal S.A.)
December 1, 2003... In the film industry, General Electric Co.'s $14 billion deal for Vivendi Universal's entertainment assets has created all the buzz of an impending blockbuster. How will GE's famous finance discipline play, movie mavens want to know, in an...

Basel's new balance: a new accord may soon help bank lend more for less.(Spotlight: banking)
December 1, 2003... CORPORATE BORROWERS, take heart. An effort by global banking authorities to change the way financial institutions reserve capital against their lending activities could pare costs for some types of borrowing, and ultimately give companies more...

Mind the Gap.(Our latest analysis of cash and earnings shows why it's critical to ... the cash-flow scorecard)(troubling gap between cash flow from operations and operating income)(statistical data included)
December 1, 2003... IS THE RECENT UPTURN IN U.S. corporate profits likely to last? Unfortunately, a new study comparing trends in cash flow with those in earnings for the largest blue-chip companies provides ample reason for doubt. The study, by the Financial...

Watch your mouth: as Reg FD enters its fourth year, enforcements so far offer hints on how to communicate.(fair disclosure)
December 1, 2003... WHEN REGULATION FAIR DISCLOSURE TOOK effect in October 2000, finance executives It some trepidation that their own words night eventually hang them. As a company's main spokesperson on matters financial, after all, a CFO is in the precarious...

The score in '04.(editor's note)(Brief Article)
December 22, 2003... This issue caps the first full year of CFO IT, a year in which we received many encouraging words from readers, won several awards, missed a typo or two, and, most important, sought to bring a fresh and relevant perspective to IT strategy as...

When CFOs get emotional.(readers write)(Brief Article)
December 22, 2003... CFO IT is a great publication that always gives me food for thought. I found the "IT Directions 2.0" survey (Fall) to be eye-opening. The survey indicates that only 40 percent of CFOs feel that IT expenditures produce the anticipated ROI, yet...

What good projects look like.(readers write)
December 22, 2003... The annual survey in CFO IT (Fall) indicated that senior finance executives are prepared to raise IT budgets. Before raising budgets, they must first exercise the same due diligence that they conduct with non-IT projects to determine if any IT...

Mobile computing: the early days.(readers write)
December 22, 2003... I enjoyed your interview with Dan Bricklin ("Spreadsheets Forever," Fall). It brought back memories of when I actually taught VisiCalc to noncomputer folks in 1981-82. I literally packed up an IBM PC and traveled from St. Louis to Chicago to...

Dot-bombs away?(Browser: news, trends, and research that drive it strategy)(Brief Article)
December 22, 2003... It's been several years since you could find the words Internet, initial public offering, and billions of dollars in the same sentence (barring those written in the past tense, of course). But as Nasdaq has climbed, so too has activity in the...

It's who you know.(Knowledge Management)
December 22, 2003... There was a time in the early '90s when "expert systems" were heralded as a breakthrough in knowledge management. The goal was to capture and forever reap the rewards of a company's best and brightest. The systems took various forms, but all in...

That's why we use lots of acronyms.(Browser: news, trends, and research that drive it strategy)
December 22, 2003... In case you were wondering, we are still very much in the Information Age. New research conducted by professors at the University of California at Berkeley's School of Information Management and Systems found that the volume of new information...

Take a number.(Browser: news, trends, and research that drive it strategy)(Brief Article)
December 22, 2003... Wahith less than two weeks to go until Wireless Local Number Portability (WLNP) becomes a reality (carriers in the 100 largest metro areas must begin to offer it on November 24, while others have until next May), businesses may find themselves...

Homeward bound.(Telecommuting)(Brief Article)
December 22, 2003... If the company parking lot is a little less crowded these days, don't blame flu season. Telecommuting is on the rise, as is the need to equip teleworkers adequately. According to The Dieringer Research Group, 23.5 million employees now work...

When complexity pays off.(Browser: news, trends, and research that drive it strategy)(Brief Article)
December 22, 2003... As a superhero moniker it leaves something to be desired, but as a badge of honor for those involved with supply chains, "complexity master" may be a worthy tag. So says Deloitte, which studied almost 600 companies in 22 countries in an effort...

Urgent assistance needed.(E-Mail Management)(Brief Article)
December 22, 2003... Almost as vexing as spam itself have been the efforts to quantify its costs. Early this year, Ferris Research said spam would cost companies an astounding $10 billion in lost productivity, help-desk support, and drain on IT resources. That...

IT management: strategic issues abound, from the burdens of regulation to the promise of new architectures.(The 20/20 Issue)
December 22, 2003... We begin our 20/20 package with a look at five managerial issues that are almost impossible to separate from one another. The management of technology has long been synonymous with the buying of technology, for two reasons: the price tag for...

Core technologies: so essential are these that we could have dubbed them "cortex technologies." Yet managing them well is far from a no-brainer.(The 20/20 Issue)
December 22, 2003... While it can be difficult to define "core" technology, "expensive but not sexy" offers a reasonable starting point. Almost every variety of information technology is pitched as "essential," but we think five areas merit particular attention in...

Emerging technologies: better, faster, cheaper--it's all good. And much of it will arrive sooner than you think.(The 20/20 Issue)
December 22, 2003... From microchips to networks to entirely new approaches to IT infrastructure, technology marches on. The post-dot-com malaise did not bring research to a halt; in fact, winnowing this list to merely five promising new technologies was far from...

Financial systems: beyond the spreadsheet lie a host of technologies that do more than simply crunch the numbers.(The 20/20 Issue)
December 22, 2003... The current intersection of finance and IT is not limited to ROI analyses, budget scrutiny, and potentially testy conversations between CFOs and CIOs. The finance function itself is the focus of a number of IT initiatives that will propel...

The fine art of NIT-picking: technological innovations abound. Which ones are right for your company?(take-away)
December 22, 2003... Twice in this issue, we mention Moore's Law, the well-known dictum that computer chips will double in power and halve in price every 18 months. Not only does the law pithily capture the essence of the digital innovation that has shaped society...

The greed factor.(from the editor)
December 29, 2003... FIRST IT WAS ENRON. THEN ARTHUR ANDERSEN. THEN Tyco, WorldCom, and Adelphia, followed by Merrill Lynch, Salomon Smith Barney, J.P. Morgan Chase, and on and on. It seems every accounting firm, every rating agency, and every investment bank has...

Fear or pity?(letters to the editor)(Letter to the Editor)
December 29, 2003... REGARDING YOUR ARTICLE "WHISTLE-blower Woes" (October), I appreciate the wishful thinking that drives the author of the article to argue that "whistle-blowers are more to be pitied than feared." The Sarbanes-Oxley Act of 2002 changed the...

Bad example.(letters to the editor)(Letter to the Editor)
December 29, 2003... I DON'T KNOW EXACTLY HOW FORD Motor Co. will use revenue management to the advantage of its customers ("The Right Price," October), but I have lots of experience with the airlines' use of revenue management to extract very large amounts of...

Multiple roles.(letters to the editor)(Letter to the Editor)
December 29, 2003... I WAS SOMEWHAT INTRIGUED BY Dominick Furlano's letter (October) responding to the article "Roads Less Traveled" (Your Move, August), on the placement of nontraditional CFOs. I have an accounting degree, and also received an MBA with a...

With a little help.(letters to the editor)(Letter to the Editor)
December 29, 2003... ICAN APPRECIATE CFO's ARTICLE "MOLD Spreads" (September). The insurance and industrial companies complain, but what are they doing to encourage preventive measures? There are automatic water-shutoff valves for leak detection and disaster...

The details of Sarbox.(letters to the editor)(Letter to the Editor)
December 29, 2003... IN A DAY WHEN THE NEW YORK STOCK Exchange can pay its CEO $140 million and the average salary of a Fortune 500 CEO is $20 million, please do not complain about the cost of compliance with the Sarbanes-Oxley Act ("Sticker Shock," September). ...

Follow the directions.(newswatch)(Brief Article)
December 29, 2003... Calendar-year companies have until New Year's Eve to comply with Fin 46 and put variable-interest entities (formerly special-purpose entities) on their balance sheets. The rule--a response to Enron's depredations--was supposed to take effect in...

Dividends bounce back.(Finance)
December 29, 2003... SINCE THE 1980S, companies in the S&P 500 that pay dividends to their stockholders have been a vanishing breed. But this year, that trend has turned around--in a big way. Although the numbers change on a daily basis, as of the end of...

The ties that bind.(Banking)
December 29, 2003... DO COMMERCIAL BANKS ILLEGALLY TIE the availability of corporate credit to purchases of investment-banking services? Perhaps, concludes an October report by the General Accounting Office. The GAO found little documentary evidence of tying,...

When tax and audit don't mix.(Accounting Firms)
December 29, 2003... The lawyers are leaving--again. Lured away from law firms in recent years by the roster of top corporate clients at the Big Four accounting firms, tax attorneys now are finding those coveted clients scared off by the Sarbanes-Oxley Act of 2002....

Finding stealth expats.(Human Resources)
December 29, 2003... QUICK: DO YOU KNOW WHERE YOUR employees are? What may seem like a human-resources concern can become a finance problem when companies lose track of staff scattered around the globe. U.S. workers on assignments abroad pose a significant tax risk...

Choose your weapon.(Stock Options)
December 29, 2003... When the edict finally comes, companies will have their choice of methods to value their stock-option expenses. In October, members of the Financial Accounting Standards Board said they would not require a particular valuation method. One...

And a happy new year.(Global Confidence Survey)
December 29, 2003... Global Confidence Survey And a Happy New Year CFOs FEEL A GROOVE COMING ON. They finally see enough signs of economic recovery to be confident that the new year will be brighter. Positive employment numbers released in November and CFOs'...

Adelphia comes clean: can Vanessa Wittman help bring scandal-wracked Adelphia out of bankruptcy--and back into investors' good graces?
December 29, 2003... WHEN VANESSA WITTMAN CAME TO ADELPHIA Communications Corp. as CFO last March, the cable-television giant was in danger of being disconnected. A victim of alleged fraud and plundering by its controlling shareholders, the Rigas family, Adelphia...

Subject to failure: recent scandals in the mutual-fund industry questioning the security of their plans.(Special Report 401(k)s)
December 29, 2003... AS THE MUTUTAL-FUND probe widens, 401(k) plan sponsors are taking a hard look at an industry long regarded as a reliable workhorse for individual retirement plans. [paragraph] That image has taken quite a beating since September 3, when New...

See it now: budgeting-and-planning software now comes with increasingly sophisticated visual aids: dashboards and scorecards.(Tech report: b&p software)
December 29, 2003... WHEN MARC KRENS joined John I. Haas Inc. 12 years ago, the privately held company was hardly a font of technological sophistication. The 10 businesses that constituted Haas, the world's largest supplier of hops for brewing, all used different...

CFO internet address directory.(disclosure)(Directory)
December 29, 2003... ADA www.ada.org/DRPLAN American Express Business ExtrAA Card www.American Express.com! BusinessExtrAACard Empire Blue Cross Blue Shield www.empireblue.com/thefacts Cisco www.cisco.com/securitynow ...

Embracing change.(CFO Succession)
December 29, 2003... IN CASE YOU HAVEN'T NOTICED, TIMES ARE TOUGH FOR finance executives. In public companies nowadays, those in the top finance chair shouldn't count on staying for long. Just under 25 percent of current Fortune 500 CFOs. have stayed more than five...

Rosie Accounting?(grapevine)
December 29, 2003... ALLEGATIONS OF IMproper accounting are still popping up-and in some unlikely places. The most recent flap stems from Rosie O'Donnell's fight with the publisher of her discontinued Rosie magazine, Gruner + Jahr USA. The former talk-show host...

Dueling missions.(grapevine)(Center for Excellence in Accounting and Security Analysis )
December 29, 2003... Watch out FASB: there's a new accounting cleanup crew. In October, Columbia Business School launched the Center for Excellence in Accounting and Security Analysis (CEASA) with seed money from IBM, the GE Foundation, and Morgan Stanley....

E-Trade Financial Corp.(CFOs On The Move)(Brief Article)
December 29, 2003... E-Trade Financial Corp. announced that CFO Leonard C. Purkis would retire at year's end. The brokerage firm named Robert J. Simmons. VP, finance, to succeed him.

AT&T.(CFOs On The Move)
December 29, 2003... Former AT&T vice chairman Charles H. Noski was named CFO of Northrop Grumman, replacing Richard B. Waugh Jr., who retired from the Los Angeles-based defense contractor.

Schering-Plough Corp. replaced Jack Wyszomierski, who had served as CFO of the drug company since 1996.(CFOs On The Move)(Brief Article)
December 29, 2003... Schering-Plough Corp. replaced Jack Wyszomierski, who had served as CFO of the drug company since 1996. Robert Bertolini, who led the pharmaceutical group at PricewaterhouseCoopers, succeeds him.