CFO, The Magazine for Senior Financial Executives articles from July 2008

CFO, The Magazine for Senior Financial Executives archives from July 2008

Second chances.(from the editor)(Editorial)
July 1, 2008... "FAIL TO PREPARE, PREPARE TO FAIL" is a popular adage among coaches, and in fact is attributed to several of them (Ben Franklin, a man whose physical exertions were limited to indoor activities, actually deserves the credit). But the maxim...

Countering the counter-attack.(letters)(Letter to the editor)
July 1, 2008... [ILUSTRATION OMITTED] Blaming counterfeiting on outsourcing is a totally flawed argument ("Counter-Attack," June). Counterfeiting existed well before manufacturing jobs moved abroad. Furthermore, outsourcing has kept product pricing down....

Accepting risk.(letters)(Letter to the editor)
July 1, 2008... Your article "Waste Management Hauls SAP into Court" (Topline, June) was quite useful for alerting technology customers to the importance of getting commitments from vendors to deliver solutions that are useful to the particular customer. In...

We're still talking.(Letter to the editor)
July 1, 2008... Regarding your two cover stories under "Can We Talk?" (May): "Can This Relationship Be Saved?" hit the relevant points. From the client side, I understand the auditor's reluctance to give advice. But even providing anecdotal information...

Big concerns.(letters)(Letter to the editor)
July 1, 2008... I had to grimace a little at what I was reading in "Top 10 Concerns of CFOs" (By the Numbers, May). In the top internal concerns, No. 1 (cost and availability of nonfinance labor) and No. 3 (cost of health care) hit close to home. Their cost is...

Not your garden-variety mistakes.(Letter to the editor)
July 1, 2008... Restatements that occur due to "errors" typically arise because of a problem with what the COSO (Committee of Sponsoring Organizations of the Treadway Commission) internal-controls framework describes as a problem of "... insufficient competent...

Q&A for health plans.(letters)(Letter to the editor)
July 1, 2008... CFOs need to ask their health plans several questions, among them, "How many nurses are assigned to my members?" "Other than providing a network, claims payments, and a fancy name, what other value is being provided that can be measured?" ("A...

More on ROC.(Letter to the editor)
July 1, 2008... In "ROC Solid" (By The Numbers, June) we discussed the virtues of operating return on capital (ROC) but did not spell out the calculation behind this metric. ROC is earnings before interest and tax (EBIT) divided by the sum of net working...

But we will dominate the swimming events.(SUSTAINABILITY)(Survey)
July 1, 2008... [ILLUSTRATION OMITTED] LET'S HOPE THE UNITED STATES doesn't perform this badly in all international competitions, or the Beijing Olympics will be about as compelling to watch as a "Bassmaster Classic" rerun. Earlier this year, the...

It takes a crisis.(MANAGEMENT)
July 1, 2008... [ILLUSTRATION OMITTED] "OUR NEW PROCEDURES GO all the way down to the 434,000th employee," says Joseph Kaeser, the notably unembattled CFO of German industrial giant Siemens AG. New procedures certainly seemed called for in the wake of the...

IFRS and when.(ACCOUNTING)
July 1, 2008... [ILLUSTRATION OMITTED] THE CURTAIN HAS RISEN, the band is playing--but when, precisely, will international financial reporting standards (IFRS) take center stage? That's the question on the minds of companies, academics, audit firms,...

To raise or not to raise?(PRICING)(Brief article)
July 1, 2008... WITH OIL PRICES SOARING, when can companies pass those higher costs on to customers? It's not an easy decision; even as they adjust to paying a premium for regular, consumers won't necessarily accept other price hikes. [ILLUSTRATION...

Far from academic.(FINANCE)
July 1, 2008... [ILLUSTRATIONS OMITTED] FIFTY YEARS AGO, the American Economic Review published an article that would revolutionize corporate finance. In "The Cost of Capital, Corporation Finance and the Theory of Investment," future Nobelists Franco...

Talking it over, and over, and ...(INVESTOR RELATIONS)(Statistical table)(Brief article)
July 1, 2008... In tough times, finance executives might expect--or hope--that shareholders would understand that the executives need to concentrate on running the business. But in fact most institutional investors want more one-on-one meetings with management...

Wal-Mart's Michael Fung: why internal auditors make good CFOs.(Best of the Web: A SNAPSHOT OF SOME OF THE MOST POPULAR STORIES FROM CFO.COM)
July 1, 2008... [ILLUSTRATION OMITTED] On the verge of flunking out of the University of Illinois's electrical engineering program, Michael Fung heard the siren song of accounting, and the rest is history. Now the CFO for the largest division of the...

R&D rule threatens future earnings.(Best of the Web: A SNAPSHOT OF SOME OF THE MOST POPULAR STORIES FROM CFO.COM)(research and development)(Brief article)
July 1, 2008... The promising (albeit incomplete) R&D project that your company acquired as part of its last merger may be a great strategic fit, but new accounting rules could change the way such "in-process" R&D affects your long-term earnings picture....

Bringing the discipline of finance to HR.(Best of the Web: A SNAPSHOT OF SOME OF THE MOST POPULAR STORIES FROM CFO.COM)(human resources)(Brief article)
July 1, 2008... If finance departments can solve problems using financial modeling, why can't human-resources officials take the same approach to assess, say, future workforce shortfalls? One reason is that many of them are simply not up to the challenge. One...

Fair-value accounting's atmosphere of fear.(Best of the Web: A SNAPSHOT OF SOME OF THE MOST POPULAR STORIES FROM CFO.COM)
July 1, 2008... What happens when you have to mark an instrument to a market that has dried up? Being told to measure the fair value of a package of subprime-mortgage securities after their fall can resemble the familiar nightmare of showing up for a college...

No new accounting rules?(Best of the Web: A SNAPSHOT OF SOME OF THE MOST POPULAR STORIES FROM CFO.COM)
July 1, 2008... As the movement toward the adoption of international financial reporting standards (IFRS) accelerates (see related story, page 16), many wonder how companies will cope with so much profound change. One interesting idea being floated is a...

Global business outlook survey: CFOs are preparing for a prolonged downturn.(by the numbers)
July 1, 2008... THESE DAYS, "OPTIMISM" is a relative term. "I'm not optimistic, but I think things may be improving, if only because we've bottomed out," says Jeff Burchill, CFO of FM Global, a commercial-property insurer. [ILLUSTRATION OMITTED] The...

Why the "Made in China" stamp may become less common.(VIEW FROM china)
July 1, 2008... HAS CHINA, and particularly the factory-rich region of the Pearl River Delta in southern China, lost its edge as a low-cost manufacturing base? Local industry associations report that more than 10,000 factories have closed down. Equal numbers...

The other green: what motivates companies to cut IT's carbon footprint? Self-interest.(in tech)(information technology)
July 1, 2008... FALL THE UNDENIABLE benefits of the information-technology revolution, it comes at a cost, or costs. The first is energy: U.S. data centers consumed 61 billion kilowatt hours in 2006, ten times the amount consumed by all residences and...

Game theory versus practice: more companies are using game theory to aid decision-making. How well does it work in the real world?(insight)
July 1, 2008... WHEN MICROSOFT announced its intention to acquire Yahoo last February, the software giant knew the struggling search firm would not come easily into the fold. But Microsoft had anticipated the eventual minuet of offer and counteroffer five...

Worlds apart: to foster successful cross-border mergers, try cultural due diligence.(deals)
July 1, 2008... TWO CHEFS ON A ROLL, A California-based maker of specialty foods, spent years searching for the right merger partner. The company wanted a buyer that would reward its founders without forcing the company to modify its carefully calibrated...

Aetna's Joseph Zubretsky.(ON THE RECORD)(Interview)
July 1, 2008... TO JOE ZUBRETSKY, CFO of $27.6 billion Aetna Inc., reforming the $2.2 trillion health-care system requires a public and a private approach. For the Hartford-based insurer, it also means taking bold action both internally and externally....

Going for the gold: can a savvy finance strategy propel women's professional soccer to post-Olympic glory?(Cover story)
July 1, 2008... [ILLUSTRATION OMITTED] NINE YEARS AGO, Brandi Chastain whipped off her jersey before 90,000 screaming fans at the Rose Bowl--not to mention tens of millions of television viewers worldwide-in celebration of the U.S. women's World Cup...

Don't mess with the IRS: the agency is taking companies to court more often, and winning. Is it time to rethink your tax position?
July 1, 2008... APRIL, always the cruelest month for taxpayers, became more so this year when the Internal Revenue Service racked up yet another victory against a corporate tax shelter. At issue was a decade-old transaction between a U.S.-based financial...

Mastering the turnaround: what it really takes to survive a corporate bankruptcy.
July 1, 2008... [ILLUSTRATION OMITTED] What awaits companies when they enter the perilous waters of a Chapter 11 bankruptcy filing? Several possible outcomes loom, none easy to achieve nor pleasant to contemplate. [paragraph] That bleak reality was made...

The great workers' comp revolt: companies successfully fought the law in California. Will they target other states as well?(insurance)
July 1, 2008... IT'S NOT OFTEN THAT A MAJOR U.S. corporation blames lower net income on workers' compensation claim costs--and in a single state, to boot. But that's what Costco CFO Richard Galanti did in the second quarter of fiscal 2003: despite an 8 percent...

Serving employees, at a price: when employees are automatically enrolled in 401(k) plans the company tab can soar.(benefits)
July 1, 2008... COMPANIES WITH 401(k) plans that suffer from lagging enrollment rates and flagging investment performance now have powerful tools to help turn things around, but they may find that fixing those problems comes at a price. Under the Pension...

Coming to America: to plug the talent gap, finance departments are hiring foreign nationals--if they can obtain visas, that is.(your move)
July 1, 2008... FOR MONA LEUNG, CFO OF Alliant Credit Union, the search for finance talent has become a lesson in international relations. Disappointed in the crop of Americanborn students coming out of business schools near the company's Chicago...

Helix Energy Solutions Group.(CFOs ON THE MOVE)
July 1, 2008... Offshore oilfield-services company Helix Energy Solutions Group has named Anthony Tripodo as its new CFO. Previously CFO of Tesco, he succeeds Wade Pursell, who resigned. Tripodo had been a director of Helix since 2003, but resigned that role...

Cynergy Data.(CFOs ON THE MOVE)
July 1, 2008... Mike Kennedy has joined payment-processing company Cynergy Data as CFO, leaving the same position at Trinsum Global Advisors. He takes the place of Gustavo Ceballos, who has been promoted to EVP of M&A/strategic planning.

Heidrick & Struggles International.(CFOs ON THE MOVE)
July 1, 2008... Executive-recruitment firm Heidrick & Struggles International has appointed Scott Krenz as its new CFO. The former CFO of Navigant Consulting, Krenz replaces Eileen Kamerick, who resigned in May.

Timex Group B.V..(CFOs ON THE MOVE)
July 1, 2008... Timex Group B.V. has selected Arthur J. Morissette to be its new CFO. Morissette comes on board from Alvarez & Marsal, where he was a senior director of restructuring and turnarounds and served as a financial consultant to the Timex Group.

Monotype Imaging Holdings.(CFOs ON THE MOVE)
July 1, 2008... Scott Landers is the new CFO at imaging-software maker Monotype Imaging Holdings. He replaces Jacqueline Arthur, who resigned in May. Landers was VP of global finance at the Pitney Bowes Software unit of Pitney Bowes Inc.

NiSource.(CFOs ON THE MOVE)
July 1, 2008... Natural-gas and electric company NiSource has chosen Stephen Smith to be CFO, effective early August. He takes the reins from Michael O'Donnell, who will remain EVP until his retirement in 2009. Smith was SVP of shared services for American...

Eight isn't enough.(grapevine)
July 1, 2008... IF BEARINGPOINT INC. LOSES one more CFO, it will have enough former finance chiefs to field a baseball team. [ILLUSTRATION OMITTED] The giant consulting firm certainly can't point to CFO retention as a core competency. In June, Eileen...