CFO, The Magazine for Senior Financial Executives articles from December 2006

CFO, The Magazine for Senior Financial Executives archives from December 2006

Frankly speaking.(Executive compensation)(Editorial)(Brief article)
December 1, 2006... TO: REP. BARNEY FRANK (D-MASS.) Congratulations on your promotion to chairman of the House Financial Services Committee. I know it doesn't become official until January, when the Democrats takes over the House, but I'll bet you're already...

The importance of social responsibility.(letters)(Letter to the editor)
December 1, 2006... Thank you so much for your timely article on the business case for social responsibility ("Virtue Rewarded," October). It is gratifying to know that company executives, especially chief financial officers, are increasingly aware of just how...

Go ahead, buy that dream house.(letters)(Letter to the editor)
December 1, 2006... Great article on the value of self-directed individual retirement accounts ("A Chance to Direct," October). However, there were a couple of misconceptions I'd like to bring to your attention. An IRA owner may invest in a sibling's business,...

Thanks for the road map.(letters)(Letter to the editor)
December 1, 2006... We have been on an adventure in unassigned seating over the past 18 months, and I really wish that your valuable real-estate report had been available at the outset of our journey ("Take My Desk--Please," October). I can assure you that your...

Who's minding the store?(letters)(Letter to the editor)
December 1, 2006... The same U.S. Congress and Administration that passes the Sarbanes-Oxley Act and holds hearings to hold corporate executives accountable for their misdeeds hides behind cash-basis accounting to mislead the American public ("Deficit Retention...

What lies ahead.(letters)(Letter to the editor)
December 1, 2006... "Delayed in the USA" (September) was outstanding in its presentation of the [infrastructure challenges] facing the United States in the coming years. Two issues remain: how fast can we close the gap and who has a solution set to focus on...

Breaking the spending cycle.(letters)(Letter to the editor)
December 1, 2006... I found "The Money Bowl" (August) to be fascinating and well written. I think that breaking the spending cycle lies in the hands of the consumer. As you know, a major source of revenue comes from broadcasting rights, whose media providers sell...

When will they learn?(letters)(Letter to the editor)
December 1, 2006... Last spring you published a letter from me regarding some of the problems with upper-level executives being out of touch with reality ("Through Shareholders' Eyes" Letters, March). Recently, we saw the results of another backroom deal that...

Correction.(letters)(Correction notice)
December 1, 2006... In "Topping the CFO," a sidebar about pay levels for finance specialties that accompanied the November compensation feature, "Pay Up," the rise in controller salaries was incorrectly given. The correct figures for the increase are: from...

Feeling the heat.(Companies now concerned over environment)
December 1, 2006... GLOBAL WARMING IS SO HOT that Corporate America is seeing green. About 75 percent of respondents to an October 2006 survey by The Conference Board are measuring their carbon footprint, or the amount of direct and indirect carbon their...

Quality, not quantity.(Enforcement actions by Securities and Exchange Commission)(Brief article)
December 1, 2006... THE SECURITIES AND EXCHANGE COMMISSION brought just 574 enforcement actions in fiscal-year 2006, the fewest since 2001. But the agency insists it is not going soft on crime. "This has been a banner year for enforcement," said SEC chairman...

Strength in number-crunchers.(Baker Tilly USA)
December 1, 2006... ACCOUNTING FIRMS UNITE! A group of midsize firms are forging a formal alliance in an attempt to offer an alternative to the Big Four. In October, 22 accounting firms announced that they will conduct business under the name Baker Tilly USA,...

Sue Nation.(Business lawsuits)(Brief article)
December 1, 2006... The cost and frequency of legal disputes at large U.S. companies continue to surge. A study by law firm Fulbright & Jaworski LLP found that large companies (more than $1 billion) face an average of 556 lawsuits worldwide and spend an average of...

Paper tigers.(Securities and Exchange Commission on online financial statements)
December 1, 2006... LOG ON TO ANY PUBLIC company's Website and with relative ease you can access current financial data, including regulatory filings. It's so easy, in fact, that for the past five years corporations have been campaigning to do away with the slick,...

Flying the unfriendly skies.(Air travel)(Brief article)
December 1, 2006... What are your biggest complaints about air travel? 75% Cramped seating 58% Security-screening delays 49% Declining service on board 47% Flight detays 30% Cost What additional...

For some, enrollment is the beginning--and the end.(Participatory management)(Brief article)
December 1, 2006... ENROLLING EMPLOYEES IN THE COMPANY 401([kappa]) PLAN involuntarily is a surefire way to boost participation rates, a new study reports, but it also creates a group of investors who don't manage their plans well The survey, conducted by...

Speech therapy.(American Management Association offering oral communication course for executives)(Brief article)
December 1, 2006... FINANCE EXECUTIVES ARE INCREASINGLY taking the stage to communicate corporate strategy to analysts, shareholders, employees, and boards. But many of them readily admit they'd rather hold a lightning rod in a thunderstorm than a microphone on...

Hard landings?(Fuel-hedging contracts)(Brief article)
December 1, 2006... NOT EVERYONE IS FLYING HIGH about lower oil prices. The cooling in jet-fuel costs since last summer sounds like good news, but it caught some airline-hedging programs off guard. Indeed, Maska Air Group recorded a third-quarter loss of $17.4...

The trade-offs of offshoring.(COUNT ON IT)
December 1, 2006... Fortune 500 companies could save a combined $58 billion annually, or $116 million per company, by offshoring many of the back-office activities currently being handled domestically, according to research from The Hackett Group. The strategic...

Free admission, no tuition.(OpenCourseWare program)(Brief article)
December 1, 2006... NEED A REFRESHER COURSE on accounting for derivatives? Thanks to the Massachusetts Institute of Technology and its burgeoning OpenCourseWare program, executives can now go back to school without entering a classroom. OCW is a free...

Management or manipulation? A new survey finds that CFOs wield surprising power over reported earnings.(Chief financial officers)
December 1, 2006... The Next Time A Competitor reports surprisingly strong earnings, consider this: more than half of CFOs say they can (legally) influence reported earnings by 3 percent or more. According to a survey of CFO readers, finance executives say they...

A productive debate: is the link between pay and productivity broken?(insight)
December 1, 2006... If There's Anything Like An Elixir For An economy, it's productivity growth. Economic theory holds that when output per worker rises, so should wages, and hence living standards. In practice, that's what transpired so impressively in the United...

View from China: in a surprise move, Wal-Mart allows its workers in China to unionize.(top line)
December 1, 2006... In Beijing These Days, It's Common To Hear the phrase "Building a Harmonious Society" being uttered by CFOs in both public and private. This newly minted Communist phrase is being taken seriously in a way that recent party lines never were. ...

Jet Blue: airline officials are contemplating banning more electronic devices from in-flight use. Why is that, exactly?
December 1, 2006... IN AUGUST 1959, PAN AMERICAN AIRLINES began offering nonstop service from New York's Idlewild airport to London's Heathrow. By all accounts, the transatlantic trip--which took about seven and a half hours on a Boeing 707-320--was a testament to...

Who do you trust?(Pretexting)
December 1, 2006... THE RECENT SPYING scandal at Hewlett-Packard garnered plenty of headlines--with good reason. The episode, essentially a clandestine operation intended to plug press leaks, harkened back to the tactics of the Nixon Administration and its...

Training day.(Pretexting)(Brief article)
December 1, 2006... Getting employees to take pretexring seriously is not always easy. The job gets more difficult if top-level managers don't take it seriously themselves. To get the attention of workers, management must establish a written policy on the...

What lies beneath: private-equity firms know how to make companies look good. But this buyer knows how to look more closely.(Private equity portfolio)(Editorial)
December 1, 2006... LIKE LOTS OF ACTIVE ACQUIRERS, Leggett & Platt Inc. often deals with private-equity sellers as it seeks targets in its "sweet spot" between $20 million and $40 million in revenues. But despite an abundance of candidates in private-equity (PE)...

The office of management & budget's Linda Combs.(Interview)
December 1, 2006... IN THE YEARS SINCE the CFO Act of 1990 became law, Linda M. Combs has had a front-row seat for much of its rocky implementation. The controller in the Office of Management and Budget (OMB), formerly the finance chief at both the Department of...

The 5 cents empire: Native American tribes parlayed legalized gambling into a $22 billion lifeline. Now states want a piece of the action.(Native American gaming)(Cover story)
December 1, 2006... The long buses start rolling into the parking lot at the Grand Casino Mille Lacs long before the morning mist has lifted from the marshlands and maple trees. A steady line of white-haired warriors, armed with supersized plastic cups and beaded...

Biotech dreaming: cities and states are vying to become biotechnology hot spots.
December 1, 2006... TWO YEARS AFTER its founding in Boulder, Colorado, Sirna Therapeutics Inc. picked up and moved to San Francisco in 2005. While most CFOs might have balked at the idea of relocating to one of the most expensive real estate markets in the...

Pay daze: linking pay to performance is harder than it looks.(COMPENSATION: PART 3 OF 3)
December 1, 2006... Throughout the 1990s, stock options were widely seen as a panacea for all compensation woes--they linked executive behavior with shareholder value and offered a "cost-free" way to compensate employees for taking risks on start-ups. In...

Promises: new pension rules are supposed to secure employees' retirement. Employers may have other ideas.(in practice: spotlight)
December 1, 2006... WHEN BEMIS CORP. saw the pension liability of its defined-benefit plan soar in late 2005 as a result of falling interest rates, the consumer-products packaging manufacturer decided to limit the accrual of new benefits to employees who were over...

New currents in currency: it's relatively simple to hedge foreign-currency risk--if you can figure out your exposure.(Foreign-currency risk)
December 1, 2006... IN THE SECOND QUARTER OF this year, Weatherford International Ltd., a $4.3 billion provider of oil and gas drilling equipment and services, sustained nearly $9.9 million in foreign-currency losses. In the very next quarter, its foreign-currency...

Should you buy D&O ASAP? Rates have dropped, but recent settlements may swing the pendulum in the other direction.(Directors' and officers' liability insurance)
December 1, 2006... JUST THREE YEARS AGO, DIRECTORS' and officers' (D&O) insurance rates were so high that Ron Foster, then CFO for troubled fiber-optics giant JDS Uniphase, threatened to set up a self-insured facility with other companies rather than pay the...

Alternative universe: nothing this side of the Boston Tea Party has raised as much ire as the alternative minimum tax, but there are things you can do to keep from getting mugged.(in practice: your money)
December 1, 2006... IT HAS BEEN CALLED "ILLOGICAL" "horrific" "a slow-motion train wreck;' and, most colorfully, the "roach motel" of taxes: you check in but you never check out. The alternative minimum tax (AMT), dreamed up by Congress in the late 1960s to make...

Gut check: hiring the right people is difficult, but patience and preparation will help ensure your instincts don't lead you astray.(Chief financial officers)
December 1, 2006... WHEN IT COMES TO hiring" one CFO recently said, "I have to admit that I feel more lucky than good" any time a new finance staffer works out well. "If there are any best practices in this area," he adds, "I sure don't know about them." Many...

A CFO for the sunshine state.(Adelaide Sink elected Chief financial officer for Florida)(Brief article)
December 1, 2006... LITTLE NOTICED AMID THE UPHEAVAL OF THE November elections was that rarest of things: a race for CFO. The citizens of Florida elected Democrat Adelaide "Alex" Sink, the former president of Bank of America's Florida operations, as the state's...

Rocket man.(Granger Whitelaw of Rocket Racing League)(Brief article)
December 1, 2006... Imagine a sport where pilots fly rockets into the heavens while thousands of spectators follow the action on high tech monitors Granger Whitelaw has, and he is so confident in the idea that he founded the Rocket Racing League. In fact, the...