CFO, The Magazine for Senior Financial Executives articles from June 2004

CFO, The Magazine for Senior Financial Executives archives from June 2004

Are you the CFO type?(Featured In June)(Brief Article)
June 1, 2004... A personality assessment can be very revealing about your preferences--and about your opportunities for growth. This often leaves finance executives with a huge gap in management skills once they advance to a senior leadership role. Assistant...

Don't ask, don't tell.(from the editor)(Brief Article)
June 1, 2004... OFFSHORE OUTSOURCING MAY BE A PROVEN CONCEPT, but it certainly has some rough edges in practice. In putting together our special section on the subject ("Off Shore," beginning on page 44), we ran into a few of those rough edges ourselves. When...

The need to manage NASA.(letters to the editor)(Letter to the Editor)
June 1, 2004... I READ WITH GREAT INTEREST YOUR article outlining NASA's financial-management challenges ("NASA, We Have a Problem," May). As chairman of the House Government Reform Subcommittee on Efficiency and Financial Management, I have spent the last...

A fan's notes.(letters to the editor)(Letter to the Editor)
June 1, 2004... I REALLY ENJOYED YOUR ARTICLE ON the financial status of Major League Baseball ("Squeeze Play," April). As a compensation professional, I have always felt that MLB has rewarded the wrong behavior. High batting averages, for example, do not...

Sense of pride.(letters to the editor)(Letter to the Editor)
June 1, 2004... I AM WRITING IN REGARD TO YOUR article "Acquired Tastes" (New Deals, April). I am the CFO of Cerwin-Vega Inc., a loudspeaker-system manufacturer based in California. I can attest to the discomfort in not being able to tell your staff of...

Questioner vs. cheerleader.(letters to the editor)(Letter to the Editor)
June 1, 2004... I READ WITH INTEREST YOUR ARTICLE on behavioral finance ("Watch How You Think," January). It gave wonderful advice to CFOs to remember one of their significant roles: that of questioner rather than cheerleader. This doesn't mean the CFO must be...

A story of recovery.(letters to the editor)(Letter to the Editor)
June 1, 2004... I WOULD LIKE TO COMMEND YOU ON your exceptional article "Adelphia Comes Clean" (December 2003). I am a risk-management consultant from a Big Five spin-off, as well as an undergraduate college student (yes, I failed to get my degree when I...

Correction.(letters to the editor)(Correction Notice)
June 1, 2004... In the article "The Doubt of the Benefit" (Spotlight, April), we quoted AFLAC senior vice president of marketing Warren Steele as stating that he believes less than 10 percent of the company's corporate customers treat their voluntary benefits...

Proxy fight.(newswatch)(Brief Article)
June 1, 2004... The SEC's plan to give shareholders more power to nominate directors to corporate boards has touched a nerve with constituents on both sides of the issue. So far, the SEC has received more than 14,500 comment letters on the proposal, which...

Break up the big four?(Audit Firms)
June 1, 2004... COMPANIES THAT ARE DISSATISFIED WITH THEIR CURRENT AUDITOR DON'T HAVE MUCH CHOICE WHEN IT COMES TO PICKING ANOTHER. In fact, for the next few months, they may have only one alternative. In April, the Securities and Exchange Commission barred...

Investment-grade conduct.(Market Reform)
June 1, 2004... THE CREDIT-RATING AGENCIES (CRAs) could soon feel a new level of scrutiny, at least if the Association for Financial Professionals (AFP) has its way. The Bethesda, Md.-based industry group has proposed a "Code of Standard Practices" for Moody's...

The new belt tightening.(Health Care)(National Business Group on Health )(Brief Article)
June 1, 2004... Companies have promoted healthy lifestyles for years, but now they're going a step further to get workers to slim down. Some employees, concerned about the link between rising health costs and bulging waistlines, are offering cash incentives to...

Calpers targets auditor conflicts.(Corporate Governance)
June 1, 2004... SHAREHOLDER ACTIVISM REACHED new heights recently when the $166 billion pension fund California Public Employees' Retirement System (Calpers) began withholding its proxy votes for hoard members at hundreds of large companies, including Boeing,...

Off Wall Street.(Equity Markets)
June 1, 2004... Investment bankers on Wall Street aren't the only ones who facilitate initial public offerings. Now, they might not even be the best. A new study of IPOs suggests that investment bankers affiliated with commercial banks may hold an advantage....

New rules for overtime pay.(Compensation)
June 1, 2004... OVERTIME PAY IS GETTING AN OVERhaul. In April, the Department of Labor released the first significant revision of the federal Fair Labor Standards Act in more than 50 years. The new rules are intended to reduce confusion--and...

Big GAAP, little GAAP.(Accounting)(generally accepted accounting principles)
June 1, 2004... Small companies are feeling the pinch of increased regulation these days. Many CFOs of smell businesses say they are being unfairly punished for the indiscretions of such large companies as Enron, WorldCom, and Tyco by having to implement new...

Curbed enthusiasm.(Global Confidence Survey)
June 1, 2004... HIGH FUEL COSTS AND THE POTENTIAL for higher interest rates have taken some of the shine off the gleaming view of the economy held by CFOs. While finance executives are still overwhelmingly positive, expectations have fallen a few notches from...

The $33 billion phone bill: businesses are spending more on cellular services than ever before. Are they getting slammed?(techwatch)
June 1, 2004... IN ONE OF THE MORE MEMORABLE EPISODES OF THE "Brady Bunch"--and really, how often do we get to use that opening?--parents Mike and Carol are shocked when they see how big their monthly phone bill is getting. The solution? They install a pay...

Penguin suits.(Operating Systems)(Linux trends and SCO lawsuit)
June 1, 2004... WHEN A YOUNG LINUS TORVALDS was working on his now-famous Linux operating system back in the early 1990s, the Finnish programmer no doubt envisioned the dawning of a new tech era--one in which ideas would be shared freely and everybody got...

Letting down your guard: with takeover defenses being increasingly dismantled, will a rise in hostile acquisitions be the result?(new deals)
June 1, 2004... PROSPECTIVE GOOGLE INC. SHAREHOLDERS AWAITing the much-anticipated $2.7 billion initial public offering found that the company is wrapping itself in a takeover defense that keeps co-founders Larry Page and Sergey Brin firmly in control. A...

Off shore: shipping jobs overseas may save money, but it's a public-relations nightmare--and that's the least of the risks.(Brief Article)
June 1, 2004... Nothing rails the American body politic like foreign competition for jobs. Today's outcry over offshoring reflects a realization that there is no longer a clear limit to the level of job function that can be outsourced overseas--college degree...

Making it work: how to avoid some common offshoring blunders--and what to do when you can't.(Off Shore)(Cover Story)
June 1, 2004... Shortly after they get the keys to their new home, customers of IndyMac Bancorp also get a "welcome call." The friendly telephone reminder lets them know when their first mortgage payment is due and where to send it. Those details help harried...

Offshoring by the numbers.
June 1, 2004... Pick a Number, Any Number... Just how many nonmanufacturing jobs are heading overseas? It depends who you ask. Goldman Sachs estimates U.S. companies have sent 400,000 service jobs overseas since 2000, and the Information Technology...

The backlash: the only thing that will make the furor over offshoring worse is hiding from it.(Off Shore)
June 1, 2004... Not since the North American Free Trade Agreement debate, when Ross Perot evoked the "giant sucking sound" of U.S. jobs pouring into Mexico, has offshoring attracted so much angry attention. Today, the debate over the decision to outsource jobs...

The view from the east: India's upstart IT-services firms face their own challenges from their giant rivals in the west.(Off Shore)(Industry Overview)
June 1, 2004... Eleven floors above the heat and noise of Mumbai's busy streets, Seturaman Mahalingam sits in the air-conditioned offices of Tata Consultancy Services (TCS) sipping tea. He looks relaxed, sanguine even, as he discusses his role as CFO of the...

New carrots, old yardsticks? Cash is back in incentive compensation, but companies are struggling to set the right performance targets.(compensation)
June 1, 2004... WITH STOCK OPTIONS INCREASINGLY out of favor, cash bonuses are making a comeback. [paragraph] A recent survey of 350 companies by Mercer Human Resource Consulting found that the percentage of overall CEO pay coming from bonuses grew from 13...

Prescription change: the new Medicare drug benefit feels good, but it doesn't really solve underlying issues.(retiree benefits)
June 1, 2004... IN 2006, WHEN THE new prescription-drug benefits kick in, Americans over 65 should finally get a break on pharmaceutical costs, thanks to the Medicare Reform Act signed into law in December. But employers that supply pharmacy coverage to...

The ephemeral finance executive: overworked CFOs are turning to interim finance managers for help. But that could jeopardize quality improvements.(management)
June 1, 2004... AFTER SEVERAL YEARS OF HELPING TO manage the strong overseas growth of her employer, Sapient Corp., Susan Johnson had to make a choice. As CFO of the Cambridge, Massachusetts, consulting-services provider, Johnson recognized that her finance...

Avoiding decision traps: cognitive biases and mental shortcuts can lead managers into costly errors of judgment.(behavioral finance)
June 1, 2004... CAN WE BE COUNTED ON to make sound decisions under uncertainty? Are our judgments always rational? Do we invariably make choices in our best interests, based on a full understanding of trade-offs and probabilities? Are we truly, in short, the...

CPA ascendant.(Finance Education)
June 1, 2004... NOT LONG AGO, THE DEGREE OF CHOICE FOR AN aspiring CFO was the master of business administration, with 61 percent of finance chiefs holding the degree, according to the Finance Leaders Association. But these days, with financial reporting under...

Computer Associates International Inc.(CFOs On The Move)(Brief Article)
June 1, 2004... Just 25 days after being named CFO of Computer Associates International Inc., Jeff Clarke, former CFO of Compaq Computer Corp., was named COO. The position had been empty since 2000....

Judith Boynton.(CFOs On The Move)(Brief Article)
June 1, 2004... Judith Boynton is out as Royal Dutch/Shell Group CFO and group managing director due to the reserves disclosure problems at the oil giant....

Frank Dunn, CEO of Nortel Networks Corp., was fired in the wake of an accounting scandal that allegedly took root during his tenure as CFO.(CFOs On The Move)(Brief Article)
June 1, 2004... Frank Dunn, CEO of Nortel Networks Corp., was fired in the wake of an accounting scandal that allegedly took mot during his tenure as CFO. Also axed were CFO Douglas Beatty and controller Michael Gollogly. For mere CFOs on the Move, go to...

Duty calls.(grapevine)
June 1, 2004... WITH AN ESTIMATED 100,000 executives active in the National Guard and Reserve, many companies are facing the departures of their top executives for long stints in Iraq and Afghanistan. Some of them are CFOs. What happens to their jobs? ...

Renaissance man.(grapevine)(Washington National Opera)(Brief Article)
June 1, 2004... They say that no experience is ever wasted. Blair Caple, the new chief of staff for the Washington National Opera, is living proof. As a teenager, Caple was a competitive concert pianist. He decided he lacked the skill to get to the top, so he...

Covering the spreadsheet.(editor's note)
June 22, 2004... Last year we published an interview with Dan Bricklin, co-inventor (with Bob Frankston) of the electronic spreadsheet ("Spreadsheets Forever," Fall 2003). It proved to be among the most popular articles we've ever run, clear evidence that...

The bank that said no to IT.(readers write)(Letter to the Editor)
June 22, 2004... I must say that I truly enjoyed reading your article "There's No 'IT' in 'Thrift'" (Spring). It is so refreshing to read about any organization, especially such a successful one, that goes against the accepted grain and does so with...

An innovation celebration.(readers write)(Letter to the Editor)
June 22, 2004... I enjoyed your article titled "Innovators' (Other) Dilemma" (Browser, Spring). The issues it described are particularly challenging within big companies, like Siemens, that have a long history and well-established products. We are [always]...

Does Amazon deserve praise?(readers write)(Letter to the Editor)
June 22, 2004... If you wanted to write about the IT side of Amazon ("Amazon Finally Clicks," Spring) and leave it there, then fine. However, to make asinine comments about its financial performance in glowing terms is wrong. For a company to be in business 10...

CIOs a la chart.(Browser: news, trends, and research that drive IT strategy)(Chief information officers)(Brief Article)
June 22, 2004... Counterintuitive factoid of the day: CIOs at small companies now tend to report more often to the CEO, while at large companies it's an org-chart dead heat between reporting to the CEO and the CFO. A recent survey conducted by the Society for...

Will tablets take off?(Mobile Aspirations)
June 22, 2004... Americans may be a sedentary lot, but not, it seems, at work. How else to explain the many efforts computer companies are making to satisfy the needs of the "mobile workforce"? Laptops and PDAs continue to shrink and get more powerful, cell...

A Wi-Fi bye-bye.(Downward Mobility)(Brief Article)
June 22, 2004... The combined muscle of IBM, Intel, and AT&T proved no match for free service, so last month the would-be Wi-Fi giant Cometa Networks announced it was shutting down. The joint venture had been built around the premise that a nationwide network...

Where the CFO would like to be.(A Dream Deferred)(Brief Article)
June 22, 2004... Many CFOs wish they were someplace else--namely, the corner office, if not as the full-time inhabitant then at least as a frequent visitor. That is, they'd like to spend more time advising the CEO on long-term strategy and less time analyzing...

Words fail them.(Security ROI)(Brief Article)
June 22, 2004... Even though computer security remains a rare growth area within IT budgets, the purse strings are tightening. And, according to Yankee Group, security budgets are becoming more influenced by lines of business, rather than being solely...

Better numbers, eventually.(Sarbox Pro & Con)(Brief Article)
June 22, 2004... Just one year ago, according to research by The Hackett Group, only 9 percent of companies said they had confidence in their financial forecasts and reporting outputs. Now, thanks to the demands of the Sarbanes-Oxley Act of 2002, that figure is...

No news is good.(Intranet Woes)(Brief Article)
June 22, 2004... If, as Mercer Human Resource Consulting maintains, a company's intranet is a mirror of the organization, you may not like what you see. Intranets were supposed to be inexpensive, efficient ways to get all employees on the same home page, kept...

Budgets budge, a little.(IT Spending)(Brief Article)
June 22, 2004... With 2004 budget cycles now under way, IT leaders say they will spend more this year than they projected at the end of 2003. A little more, anyway. According to a Forrester Research survey of almost 900 North American companies, IT spending...

Terrible things to waste.(Asset Disposal)(Brief Article)
June 22, 2004... While improving PC sales (see related story below) are good news for the companies that make them what about the rest of us? For every new machine being unpacked at work or at home, an old one may be headed for the trash. That adds up--to a...

Has the PC war been won?(Black Ink Dept)(Brief Article)
June 22, 2004... Even as PC companies cope with environmental concerns, they have other battles to fight; namely, the one for market supremacy. As one sign of how difficult that fight can be, consider Dell: the company saw its revenue rise a remarkable 22...

You bought it, now audit: your technology infrastructure can be audited-and probably should be.(bookmark)
June 22, 2004... These days, audits are rarely a source of solace, but finance executives who find IT daunting may actually be relieved to know that IT audits are suddenly in vogue, and provide exactly the sort of big-picture view that most CFOs need. IT audits...

The meter system: utility computing aims to transform IT into a pay-as-you-go service. That sounds far simpler than it is.
June 22, 2004... The computer industry has a certain genius for turning its own excesses and errors into new business opportunities. Computer code written with no regard for a new millennium? What an opportunity for Y2K remedial work. The Internet as a...

Spreadsheet hell? CFOs are interested in the many new technologies being pitched to them, but are they really trapped in ...
June 22, 2004... Call it the "innovation gap," a yawning space between two parallel universes. In one, companies operate more effectively than ever before, powered by a rash of new technologies that tackle every aspect of financial management, from the mundane...

Priority: mail: from keeping it up to keeping it safe to just plain keeping it, E-mail now warrants an actual strategy.
June 22, 2004... As E-mail becomes the lifeblood of Corporate America, what happens when the blood stops flowing? A 2003 study of 850 IT managers by research firm Dynamic Markets for Veritas Software found that one-third of respondents thought a week without...

Search is on: the search-engine world is changing everything, from how your company markets and advertises to how your employees create and share information.
June 22, 2004... On the Internet, the shortest distance between two points is a well-conceived search query. In fact, these days most "surfing" entails a hurried perusal of the first few sites returned by a search engine as you quickly try to find exactly what...

The tract of the matter: you read (about) the article, now read the book: Nick Carr expands his controversial thesis regarding IT's strategic importance.(IT strategy)
June 22, 2004... Just over a year ago, Nicholas G. Carr offered a modest proposal that still has the information technology industry reeling. The veteran Harvard Business Review editor wrote an article headlined "IT Doesn't Matter," in which he argued that...

Going, going ... Electronic marketplaces such as Covisint were once poised to revolutionize purchasing, Now, even "evolutionize" might be overselling it.(E-business)
June 22, 2004... Call it dot-bomb redux. Amid great fanfare in 2000, Covisint wowed the procurement world when it launched its ambitious global online business-to-business marketplace for the car industry. Supported by the likes of Daimler Chrysler, Ford, and...

Who does what, and why? New technology treads a delicate line, between helping employees--and nailing them.(emerging IT)
June 22, 2004... While it's generally agreed that employees pose a greater security threat than hackers, virus creators, or other cyber-criminals, what's less well known is that some of the newest tools for ferreting out evidence of wrongdoing can play other...

Seven days in May: when it comes to computer security, you can't have too many chiefs.(take-away)
June 22, 2004... The hack stops here. So says a group of influential chief executives who want to elevate computer security to a board-level concern. The 150 members of the Business Roundtable released a report last month in which they said that computer...