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

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

Drug discount peddlers.(Brief Article)
November 1, 2005... To control the skyrocketing costs of prescription drugs, many companies have turned to pharmacy benefit managers. But like other third-party administrators, PBMs may be influenced by incentives to maximize their own revenues at the expense of...

Two for the money.(Brief Article)
November 1, 2005... HERE'S WHAT COMPANIES WANT from their finance departments: More analysis. Better analysis. Faster analysis. And--don't forget--lower cost. Strategic business partnering and lower transaction costs have been the twin goals of finance...

Letters.(Letter to the Editor)
November 1, 2005... In "Can You Spot the Finance Expert?" (September) Alix Nyberg Stuart does an excellent job reviewing issues companies must consider when designating a member of the audit committee as a financial expert. Although the required industry...

Can--or should?(letters)(Letter to the Editor)
November 1, 2005... I enjoyed "Secrets of the M&A Masters" (September), and agreed with many of the article's observations. However, I think you missed a subtle but important characteristic of the masters' approach to mergers and acquisitions: they view M&A as an...

The value of working cap management.(letters)(Letter to the Editor)
November 1, 2005... Your article on working capital management ("Capital Ideas," September) provides important insights into how companies are becoming more sophisticated in their approach to working capital. While the trend is still for companies to "squeeze"...

Leaders versus leadership.(letters)(Letter to the Editor)
November 1, 2005... I just finished reading and distributing your editorial ("Power(2): The People") about the value of human-capital management. I couldn't agree more. I have been involved with several network marketing companies not because I necessarily believe...

More thoughts on optimizing performance.(letters)(Letter to the Editor)
November 1, 2005... I enjoyed "Building A Better Workforce" because you clearly identified a lot of the challenges that organizations face in seeking to optimize the capabilities of their workforce. However, you missed a critical element in the...

Waste to burn.(ENERGY)
November 1, 2005... GAS, OIL, AND ELECTRICITY are expensive these days. Maybe it's time to switch to landfill gases, agricultural waste, and carpet scraps. Some companies are doing exactly that. Just last month, Shaw Industries Inc., a carpet manufacturer...

Executive perks exposed.(DISCLOSURE)
November 1, 2005... Companies are revealing more about the extras they bestow on executives, such as country-club fees, insurance, the use of corporate-owned housing, and the use of corporate jets for personal trips. These perks, which have often been hidden...

Et Tu, Ben and Jerry's?(FRAUD UPDATE)
November 1, 2005... IN ITS MILDLY UTOPIAN mission statement, Ben and Jerry's Homemade, the socially conscious Vermont ice cream maker, testifies to the company's commitment to create "economic opportunities for those who have been denied them." Apparently,...

When your ship comes in, beware.(SARBANES-OXLEY)
November 1, 2005... THIS SUMMER, THE U.S. COURT of International Trade gave CFOs one more thing to think about when they certify the accuracy of their companies' annual reports: customs regulations. In two harshly worded rulings issued in July, the court...

These instruments won't play.(OPTIONS EXPENSING)
November 1, 2005... OF ALL THE WAYS companies might price their employee stock options to comply with FAS 123R, market-based valuations won't be one of them--at least not for now. In September, the Securities and Exchange Commission put the kibosh on proposals...

Fraud factors: signs that a company could be cheating.(top line)
November 1, 2005... AMID THE SCORES of financial scandals that have come to light during the past few years, corporate watchdogs have offered a slew of reasons why companies go astray. Researchers Jared Harris and Philip Bromiley of the Carlson School of...

Director's cut.(Workers' compensation)(Brief Article)
November 1, 2005... It's not easy sitting on a board these days. Not only has the time commitment nearly doubled, but the risk of getting sued has also increased. For this reason, corporate directors are demanding--and getting--more dough. A new study finds...

Flying on bust airlines.(BUSINESS TRAVEL)
November 1, 2005... YOU MIGHT NOT BE piloting a company through Chapter 11 bankruptcy, but there's a good chance you'll be flying on an airline that's broke. With Delta and Northwest joining the Chapter 11 club, which already hosts US Airways and United,...

Health-care costs: relief in sight?(top line)
November 1, 2005... A survey by Mercer Human Resource Consulting found that employers expect health-care cost increases to slow to 6.4 percent in 2006, However, the reduction in cost growth is due to continued cuts in benefits and other steps to manage costs. The...

Paying for praise?(RESEARCH)
November 1, 2005... "PAYING FOR ANALYST COVERAGE is kind of like renting a prom date," says David Mickelson, CFO of Redhook Me Brewery, a microcap company based in Woodinville, Wash. Mickelson has regularly turned down the services of researchers-for-hire, despite...

File under "Looney".(IPO)
November 1, 2005... IMAGINE HAVING ALAN GREENSPAN, Jimmy Carter, and Paul O'Neill on your audit committee. That was the claim of Apollo Publication Corp., in a registration statement filed with the Securities and Exchange Commission in September for an initial...

View from China: Chinese admiration for U.S. business acumen diminishes even as business ties between the nations strengthen.(top line)
November 1, 2005... CHINA'S FINANCIAL COMMUNITY is experiencing a subtle but powerful shift in perceptions about the United States. Two recent events have eroded what had been a grudging admiration for American capitalism. The first is the uproar over last...

Profile of the CFO: finance chiefs at large companies tend to be Ivy League-educated men with CPAs who don't stay in their jobs for long.(by the numbers)
November 1, 2005... WHO RUNS FINANCE AT THE BIGGEST U.S. COMPANIES? According to new numbers from Spencer Smart, an executive recruiting firm, three-quarters of Fortune 1,000 CFOs are first-time finance chiefs. Not surprisingly, the vast majority have risen...

Market magic: internal markets can solve thorny allocation problems and predict the future.(insight)
November 1, 2005... "MAN IS AN ANIMAL THAT makes bargains," observed the great 18th-century economist Adam Smith. Today, this instinct is given free rein in markets around the globe. Most Americans--and certainly most public-company CFOs--take it as an article of...

Many happy returns: the IRS wants to usher in the era of E-filing, but going paperless won't be easy.(in tech)
November 1, 2005... THIS PAST JANUARY, WHEN OFFICIALS AT THE Internal Revenue Service announced they wanted many corporations to begin filing their returns electronically for the 2005 tax year, critics howled. After all, few companies appeared ready to go...

Small and smaller.(usage of notebook computers)
November 1, 2005... For years, PC makers have trumpeted the coming mobile-computing revolution. In that lilac-scented world, tanned, svelte executives tote around feathery-light, powerful notebook computers, accessing E-mail and office files from bullet trains and...

Cultivating a network: Telecom M&A is at a fever pitch as new technologies and changing markets force consolidations.(Mergers, acquisitions and divestments)
November 1, 2005... EVEN AMONG THE HIGH rollers of the telecom industry, Zhone Technologies has to be considered a big spender. Since 2000, the company has bought a dozen companies for a total bill of $600 million. Zhone boasts it is assembling all the necessary...

Intel's Andy Bryant.(Interview)
November 1, 2005... FOR MUCH OF ITS 37-YEAR HISTORY, INTEL has served as a bellwether of the technology sector. So it's fitting that the role Andy Bryant, 55, has carved out at the semiconductor giant since becoming CFO in 1994 hints at the many changes under way...

Striking a balance: can finance departments be cost-effective and smart at the same time?
November 1, 2005... In the decade-long marathon known as "finance transformation," CFOs have been chasing two goals. One is efficiency: the routine work of finance--from paying vendors to making reconciliations--should be done centrally and cheaply. The other is...

Is this any way to run a railroad? You think you've got problems? Amtrak's got an overpaid workforce. Its trains and tracks are falling apart. Worse, the carrier's balance sheet is a flat-out mess.
November 1, 2005... AS MARX BROTHERS movies go, Go West isn't much. The aging comedy team was running out of ideas, and it shows: the plot is predictable and the gags are stale. Yet there is one memorable scene in the 1940 film. in it, the boys--desperate to keep...

China's growing appetite: failed bids haven't dampened the country's hunger for U.S. acquisitions.(Company Profile)
November 1, 2005... FOR YANG HUA, defeat was completely unexpected--and the memory of it still stings. As chief financial officer of the Chinese National Offshore Oil Corp. (CNOOC), the third-largest oil company in China, he was a key figure in last summer's...

Picture this: businesses produce tons of data on a daily basis. Making sense of that information is no small feat.
November 1, 2005... UNLIKE MANY CORPORATE executives, Jan-Willem Beldman says he doesn't have a problem with the vision thing. A team leader at Mentor Graphics Corp., a computer hardware and software design company, Beldman can quickly pinpoint up-to-the-minute...

Rethinking the worst case: how disaster recovery is changing in the wake of Katrina and Rita.(spotlight)
November 1, 2005... TO UNDERSTAND HOW HURRICANE Katrina is changing the way Corporate America thinks about disaster recovery, look no further than the computer-services company in New Orleans that located its data center to the third floor of its building to...

Finance is from Mars, HR is from Venus: can finance and human resources ever see eye to eye? They'd better.(human resources)
November 1, 2005... IN THE CLASSIC CORPORATE paradigm, human-resources heads are the "people" people who want to make employees happy, CFOs are the "numbers" folks who just want to cut costs, and the twain never meet. Under the pressure of higher compensation and...

A trade secret comes to light, again: globalization and customer consolidation are spurring renewed interest in trade-credit insurance.(insurance)
November 1, 2005... THREE YEARS AGO, SKYWORKS Solutions Inc. was in a quandary. Sales of its semiconductors were soaring and the company was eager to increase capacity and boost research and development. To finance the expansion, Skyworks wanted to tap a key...

Too taxing: the flood of material weaknesses related to tax reflects a lack of expertise--and the evolution of an art into a science.(tax)
November 1, 2005... IF ACCOUNTING IS FULL OF GRAY areas, tax is a pea-soup fog. So it's no surprise that the most common material weaknesses revealed in the first round of Sarbanes-Oxley Section 404 filings are tax related. For nearly one-third of the 488...

The long goodbye: be sure you know what you're getting into with a noncompete agreement.(your move)
November 1, 2005... LAST SEPTEMBER, KAI-FU LEE FINALLY went to work, two months after Google hired him to set up a research-and-development office in China. The holdup? Lee had signed a noncompete agreement with Microsoft, his previous employer, and Microsoft had...

Bellsouth Corp.(CFOs ON THE MOVE)
November 1, 2005... Bellsouth Corp. CFO Ronald Dykes is retiring at year-end. He will be succeeded by Patrick Shannon, SVP of finance....

British Airways.(CFOs ON THE MOVE)
November 1, 2005... British Airways will start the new year with a new CFO. Keith Williams will take the job as John Rishton leaves to become finance chief at grocer Ahold NV....

Solectron Corp.(CFOs ON THE MOVE)
November 1, 2005... Kiran Patel has left his post as CFO at semiconductor-maker SoIectron Corp. to join Intuit Inc. in the same role....

California Water Service Group.(CFOs ON THE MOVE)
November 1, 2005... Richard Nye has been placed on administrative leave at California Water Service Group as he faces civil charges relating to his activities at Cornerstone Propane Partners LP. Corporate counsel John Tootle has been named acting CFO....

Laureate Education Inc.(CFOs ON THE MOVE)
November 1, 2005... Rosemarie Mecca is the new CFO at Laureate Education Inc., the for-profit education company....

Procter & Gamble.(CFOs ON THE MOVE)
November 1, 2005... Thomas Tippl, formerly head of investor relations at Procter & Gamble, will head up the finance department at entertainment distributor Activision Inc....

Tim Warner Cable.(CFOs ON THE MOVE)
November 1, 2005... Time Warner Cable has promoted Landel Hobbs from finance chief to COO.

Easy rider.(Mike Gaber retired from Pulte Homes Inc.)(Brief Article)
November 1, 2005... AFTER RETIRING AS CFO of Detroit-based Pulte Homes Inc. in 2001, Mike Gaber, 49, faced a difficult decision--play golf or get his business engine revving again. He chose the latter, and, while the move returned him to the corporate world as...

The right part?(appointment of Robert Dellinger in Delphi Corp.)(Brief Article)
November 1, 2005... AT FIRST GLANCE, bankrupt auto-parts maker Delphi Corp. might seem to have made an odd choice for its new CFO in Robert Dellinger, former CFO of Sprint Corp. After all, Dellinger is an industry outsider who has never helped a company through...