CFO, The Magazine for Senior Financial Executives articles from December 2005

CFO, The Magazine for Senior Financial Executives archives from December 2005

What's my metric?(BENCHMARKING)
December 1, 2005... Most CFOs use a fairly standard set of measuring rods to evaluate corporate performance: earnings and cash flow, for instance. But consider the gauges they apply within their own industries, and you get a more varied picture. This month,...

Sour grapes.(Brief Article)(Editorial)
December 1, 2005... IF ANYTHING IS MORE REMARKABLE than the European Union's big-bang adoption of a new set of international accounting standards this year, it's the evaporation of the presumed superiority of U.S. accounting standards. History has burdened...

The negative impact of Sarbox.(letters)(Letter to the Editor)
December 1, 2005... Don Durfee, the author of "The Top Spot" (October), is right that more CFOs are transitioning to CEO because of a renewed emphasis on shareholder value and corporate governance. But he's wrong in suggesting that Sarbanes-Oxley is not a...

Inside your banker's head.(letters)(Letter to the Editor)
December 1, 2005... Thanks for the great article on understanding the banker's profitability models ("Inside Your Banker's Head," CFO Banking & Finance Special Issue, October). Companies should also be aware of the heavy orientation toward credit and...

Empowering the workforce.(letters)(Letter to the Editor)
December 1, 2005... I found your article "Building a Better Workforce" (CFO IT, Fall 2005) quite interesting and helpful. As the CFO of a midsize company, I've learned that understanding how to do more with less is critical. In my experience, empowering the...

Troubles with leasing.(letters)(Letter to the Editor)
December 1, 2005... Great article on leasing ("Hidden in Plain Sight," August), but you are missing an interesting note. What about auto, truck, and other types of equipment dealers that sell equipment with recourse debt? They have booked the sale and booked the...

Finance costs rising: a blip, or a trend?
December 1, 2005... WHILE THE COSTS OF COMPLYING with Sarbanes-Oxley have been well-documented, new research from The Hacker Group casts them in a particularly dark light: for the first time in 13 years, the cost of finance (measured as a percent of revenue) has...

Too many Indians, not enough chief.(CAREERS)(responsibilities of chief financial officers)
December 1, 2005... CALL IT THE CURSE OF COMPETENCE. CFOs have proven so adept at juggling an astonishing array of duties--from treasury to purchasing and planning--that their bosses have happily piled on more. According to Washington, D.C.-based CFO Executive...

Tuition transition.(TAX BREAKS)
December 1, 2005... THANKS TO THE EFFORTS of a dental-supplies salesman, you may now be able to deduct the cost of an MBA degree. Daniel Allemeier won his case against the IRS in August, arguing that the $15,000-plus he spent on his degree should be tax-deductible...

Steal this data.
December 1, 2005... NEW NOTIFICATION LAWS requiring companies to report data breaches to consumers are surging through state legislatures, adding a new compliance wrinkle for companies still struggling to satisfy the demands of Sarbox, the Health Insurance...

So much for personality.(top line)(Brief Article)(Illustration)
December 1, 2005... SO MUCH FOR PERSONALITY "If two job candidates possessed similar skills, what additional qualification would be the most valuable?" Industry-specific experience 41% Software/IT knowledge 33% Certification or...

Which begs the question: what's a mailstream? More and more executives are using their mailstream to grow profit.
December 1, 2005... THE FLOW OF MAIL, documents and packages has become increasingly diverse, containing everything from biffs and e-statements to direct mail and goods like DVDs. In fact, it has become so complex that some key players have coined a new term,...

A fringe benefit on the fringe.(401(K) OPTIONS)
December 1, 2005... NEW FEDERAL RULES GOVERNING employer-sponsored retirement plans are scheduled to take effect in January, and the response from large employers has been surprisingly tepid. Companies will soon be allowed to offer employees the option of...

Mum is not the word.(STOCK BUYBACKS)
December 1, 2005... WITH CORPORATE AMERICA on a stock-buyback binge--companies in the Standard & Poor's 500 index repurchased $81 billion in stock in the quarter ended June 30, a 92 percent jump from the same period in 2004--experts are warning companies to be...

Fine time at the SEC.(ENFORCEMENT)
December 1, 2005... RECORDS WERE MADE TO BE BROKEN. But when the Securities and Exchange Commission levied an unheard-of $10 million fine against Xerox in April 2002, few could have imagined the amounts that other companies would soon be shelling out. Less than...

Not-so-big MACs.(M&A)
December 1, 2005... REAL ESTATE IS NOT the only buyer's market in town: corporate M&A has also moved from a seller's to a buyer's market, according to the fourth annual MAC survey from Nixon Peabody LLP. The taw firm examined more than 300 deals and assessed the...

Crime, punishment, and relief.(LITIGATION)
December 1, 2005... IT MAY BE SAFE for everyone at KPMG International to exhale. When the accounting firm announced this past summer that it had reached an agreement with the Department of Justice to defer prosecution of fraud charges connected to its sale of...

Cut once, measure twice.(COST REDUCTIONS)
December 1, 2005... IT'S RELATIVELY EASY to cut certain costs, but far more difficult to keep them cut. So argues McKinsey & Co., which finds that a variety of factors often undo the gains. Simply put, companies make cuts when times are bad but fail to apply...

Still waiting: despite several years of closer finance-IT interaction, few CFOs feel good about the value of technology investments.(by the numbers)
December 1, 2005... IT WASN'T SUPPOSED TO BE THIS WAY. The tightening of IT purse strings that followed the dot-com collapse forced most companies' finance and IT departments to collaborate as they never had before, a trend that gained further momentum when...

Why crossing the Atlantic is so challenging for American companies.(VIEW FROM Europe)
December 1, 2005... IN 1967, LE DEFI AMERICAIN (THE AMERICAN Challenge) shot up the best-sellers' list in France. Its author, the flamboyant intellectual Jean-Jacques Servan-Schreiber, predicted that a growing number of U.S. multinationals crossing the Atlantic...

Two views of virtue: the corporate social responsibility movement is picking up steam. Should you worry about it?(insight)
December 1, 2005... ORPORATE SOCIAL RESPONSIBILITY (CSR), the idea that companies have obligations not just to their investors but also to their stakeholders, society, and the environment, is hot. A recent Google search turned up 4,680,000 hits for the phrase,...

Two mergers are better than one: the seldom-used double-dummy structure is trotted out in one of the year's most talked-about deals.(deals)(merger of Oracle Corp. and Siebel Systems Inc.)
December 1, 2005... ORACLE CORP'S BID TO BUY SIEBEL Systems Inc. set Silicon Valley abuzz this fall as gossips gloated over the details of the final chapter in a rivalry that simmered for more than a decade. Siebel founder Thomas Siebel left Oracle in 1990, and...

The suite lowdown: does Oracle's acquisition of Siebel signal the end for best-of-breed software?(in tech)
December 1, 2005... WHILE PROLONGED viewing of a diagram of Oracle Corp.'s $5.8 billion double-dummy acquisition of Siebel Systems Inc. may induce vertigo, an aerial picture of the megadears impact on software purchasing is equally unsettling. The fact is,...

Left to their own devices.(PORTABLE STORAGE)
December 1, 2005... IN APRIL 2004, WE REPORTED ON THE growing--some would say rampant--use of unauthorized technologies in the workplace (see "Monsters Inc"). The list of these so-called rogue technologies included flash drives, digital cameras, and MP3 players....

Bob McDonald: American Red Cross.(ON THE RECORD)(Interview)
December 1, 2005... MANY CFOs CAN POINT TO A MAJOR DISASTER or two in their careers, but Bob McDonald measures his performance by them. As CFO of the American Red Cross, he has confronted the most daunting 12month period in the organization's history: beginning...

The narrowing GAAP: the convergence of foreign and domestic accounting rules could catch some U.S. companies by surprise.(Cover Story)
December 1, 2005... PRESSED LAST MARCH to describe the biggest controversy between U.S. and international accounting standards setters, Robert H. Herz replied, "I like one brand of Scotch, and Tweedie likes another." Herz, the often-droll chairman of the...

Days of wine and mergers: small domestic wineries struggle to compete in a fast-consolidating market.
December 1, 2005... IN 1985, LEGENDARY WINE CRITIC and industry shaker Robert Parker did something he had never done before: he gave a bottle of California wine a 100 rating. The perfect score went to a 1985 Reserve Cabernet Sauvignon produced by a struggling...

Power to the little people: e-business gives customers new leverage over corporate giants.
December 1, 2005... If the first decade of E-commerce found companies exploring fresh possibilities, the next will be marked by their growing understanding of a critical new reality: customers are now in control. From their vastly increased ability to compare...

Sitting tight: our second annual capital spending scorecard shows that many, if not most, companies have reason to be wary about new spending.(capital spending)
December 1, 2005... After two years of decline, U.S. companies increased their capital spending modestly in 2003 and 2004, but the amount is still sharply lower than its peak in 2000. Petrochemical companies led the rebound, investing billions to upgrade old...

Winds of change: in the wake of hurricanes, even insurers must reassess their risk exposures.(spotlight)
December 1, 2005... MANY LARGE corporations in the states of Louisiana, Mississippi, Florida, and Texas had prepared for the devastating hurricane season of 2005, assuring the continual flow of business through well-oiled disaster-recovery plans. But it's the...

Divided loyalties: companies are starting to look twice at their real estate brokers' business relationships.(real estate)
December 1, 2005... BRACE YOURSELF FOR A SHOCK: your company's real estate broker may not always have your best interests at heart. True, this is probably about as stunning as, say, the revelation that securities analysts once wrote flattering things about...

Games they play: the other shoe has yet to drop on pension consultants' possible conflicts of interest. But companies can't afford to wait.(pensions)
December 1, 2005... TWO YEARS AGO, SENIOR EXECUtives at Land America Financial Group Inc. hired a pension consultant to review the investment options in the company's 401(k) plan. The reason? Managers at the title insurance company wanted an independent analysis...

Keeping in touch: corporate alumni networks are an increasingly valuable resource for employees and employers alike.(your move)
December 1, 2005... WHEN DICK Bruder founded the Cincinnati Consulting Consortium Ltd. in 1999 after working in finance at Procter & Gamble for 35 years, his earliest marketing efforts targeted his fellow P&G alumni. One of them, Robert S. Morrison, was the...

Baker Hughes.(CFOs ON THE MOVE)
December 1, 2005... Baker Hughes CFO G. Stephen Finley is retiring from the oil services firm in March....

Computer Sciences.(CFOs ON THE MOVE)
December 1, 2005... Computer Sciences has promoted Michael Keane, former VP of finance, to the top finance job....

Rite Aid.(CFOs ON THE MOVE)
December 1, 2005... Kevin Twomey is the new finance head at Rite Aid after a promotion from the chief accounting officer position....

BuySafe.(CFOs ON THE MOVE)
December 1, 2005... Mary Dridi has left software purveyor WebMethods to become CFO at BuySafe, a company that bonds online merchants....

Morton's Restaurant Group.(CFOs ON THE MOVE)
December 1, 2005... Steakhouse chain Morton's Restaurant Group has promoted CFO Thomas Baldwin to the CEO spot upon the retirement of Alien Bernstein....

Vulcan.(CFOs ON THE MOVE)
December 1, 2005... Denise Fletcher, onetime CFO of MasterCard International, is the new EVP of finance at Paul Allen's investment firm, Vulcan....

Capella Healthcare.(CFOs ON THE MOVE)
December 1, 2005... Denise Wilder Warren takes over as CFO at Capella Healthcare....

Choicepoint.(CFOs ON THE MOVE)
December 1, 2005... Data provider Choicepoint has promoted David Trine from controller and treasurer to CFO. Former finance head Steven Surbaugh is now chief administrative officer....

Domino's Pizza.(CFOs ON THE MOVE)
December 1, 2005... Domino's Pizza has tapped L. David Mounts, a former corporate controller at United Parcel Service, to lead the finance department....

International Paper.(CFOs ON THE MOVE)
December 1, 2005... Marianne Parrs succeeds Christopher Liddell as CFO at International Paper.

Hi & bye.(TRANSITIONS)
December 1, 2005... WHY IS ORACLE HAVING SO much trouble hanging on to CFOs? In just over a year it has seen two of them flee--first Harry You and now Gregory Maffei, a former CFO of Microsoft. Various rumors, mostly centered on personality clashes, are...

Short fuse.(grapevine)
December 1, 2005... NOT SINCE FORMER Enron president Jeffrey Skilling called an analyst a choice expletive back in 2001 have analyst calls been so entertaining. But the recent outbursts of Patrick Byrne, the CEO of Salt Lake City-based Overstock.com, are also...