The World Factbook CIA Home CIA Home About CIA Careers Offices of CIA News & Information Library TEEN?s Page Contact CIA CENTRAL INTELLIGENCE AGENCY

         

This page was last updated on 31 May, 2007


Map of Algeria




The cfo s first hundred days: a mckinsey global survey:
Definition Field Listing
The Economist (December 20, 2005), in an irreverent mood, talks about how churches are having to model themselves on businesses and, in particular, to learn the rules of marketing:. To show how it is changing—and how to work through the evolving expectations—we surveyed 164 CFOs of many different tenures 2. We strive to provide individuals with disabilities equal access to our website. If you would like information about this content we will be happy to work with you. Please email us at: Many CFOs received very explicit guidance from their CEOs on the key issues of concern. World Changers Ministries has a music studio and a record label. Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism. We strive to provide individuals with disabilities equal access to our website. If you would like information about this content we will be happy to work with you. Please email us at: Our learning programs help organizations accelerate growth by unlocking their people's potential. We strive to provide individuals with disabilities equal access to our website. If you would like information about this content we will be happy to work with you. Please email us at: The Purpose-driven Life, is this decade's best seller with 19.5 million copies sold so far and compiling at the rate of 500,000 per month." Rich Karlgard interviewed Peter Drucker "On Leadership" for Forbes on November 19, 2004. He got two for one that day, also conversing with Rick Warren, pastor of the immensely successful. Most successful churches are humming with technology. Willow Creek sports four video-editing suites. In most cases, if you find one you like pluck it down from the shelf with a computer click which will lead you to Amazon.com. Knowledge and the Wealth of Nations, Paul Krugman tells of the struggle between "the Pin Factory and the Invisible Hand," a paradox Warsh develops in his book. Through increasing scale and specialization, enterprises increase productivity and drive out smaller competitors, finally achieving monopoly. The problem, of course, is that it is an assemblage of competitors that makes the market system work, letting new ideas, best practices, and better values rise to the surface. Both scale and the lack of it can present problems. Gaining credibility early on is a common challenge—particularly, according to our survey, for a CFO hired from outside a company. In some cases, it's sufficient to invest enough time to know the numbers cold, as well as the company's products, markets, and plans. In other cases, gaining credibility may force you to adjust your mind-set fundamentally. - Literature - Art - Home & Garden - Reference - Nature & Travel - Food, Wine, & Tea - Science & Technology - Education - History - Politics, Society, & Culture - Health - Miscellaneous. - Home - About This Site - Agile Companies - Annual Reports - Best of Class - Best of the Triangle - Big Ideas - Brain Stem - Business Diary - Dunk's Dictums - Global Wit & Worldly Wisdom - Gods, Heroes, & Legends - Infinite Bookstore - Investor Digest - Letters from the Global Province - Other Global Sites - Poetry & Business - Scenes from the Global Province -. Needless to say, it only a few years after Galbraith laid out this fantasy that Federal Reserve Chairman Greenspan came to look at the stock market as filled with irrational exuberance. Fiction is eminently true, just a bit early. (6/28/06). Our flagship business publication has been defining and informing the senior-management agenda since 1964. Operating Manual for Spaceship Earth. That wonderful futurist and spinner of geodesic domes wrote this short, accessible book that says you have to be an intellectual pirate to win globally. That's about right. The shortest distance between two points is not on the highways, sea lanes, or air passages plotted by our bureaucrats, but on the pathways that never made it onto the maps. We're taken as well by his writings about big-time athletics. There, we think, he depicts avant garde management processes that leave the business world in the dust. On the one hand, he has shown how general managers with limited resources can put together winning ball clubs by combining statistical analysis with recruiting. We discussed just this in. Transitions offer a rare opportunity: the organization is usually open to change. More than half of our respondents made at least moderate alterations in the core finance team early in their tenure. As one CFO of a global software company put it, "If there is a burning platform, then you need to find it and tackle it. If you know you will need to make people changes, make them as fast as you can. Waiting only gets you into more trouble.". About three-quarters of new CFOs initiated (or developed a plan to initiate) fundamental changes in the function's core activities during the first hundred days. Not only is the job more complicated, but a lot of CFOs are new at it—turnover in 2006 for Fortune 500 companies was estimated at 13 percent. 1. Our learning programs help organizations accelerate growth by unlocking their people's potential. Building that kind of alignment is a challenge for CFOs, who must have a certain ultimate independence as the voice of the shareholder. That means they must immediately begin to shape the CEO's agenda around their own focus on value creation. Among the CFOs we interviewed, those who had conducted a value audit could immediately pitch their insights to the CEO and the board—thus gaining credibility and starting to shape the dialogue. In some cases, facts that surfaced during the process enabled CFOs to challenge business unit orthodoxies. What's more, the CFO is in a unique position to put numbers against a company's strategic options in a way that lends a sharp edge to decision making. The CFO at a high-tech company, for example, created a plan that identified several key issues for the long-term health of the business, including how large enterprises could use its product more efficiently. This CFO then prodded sales and service to develop a new strategy and team to drive the product's adoption. There are a few critical tasks that all finance chiefs must tackle in their first hundred days. To show how it is changing—and how to work through the evolving expectations—we surveyed 164 CFOs of many different tenures 2. Our mission is to help leaders in multiple sectors develop a deeper understanding of the global economy. Several of our CFOs launched a rigorous look at the finance organization and operations they had just taken over, and many experienced CFOs said they wished they had done so. In these reviews, the CFOs assessed the reporting structure, evaluated the fit and capabilities of the finance executives they had inherited, validated the finance organization's cost benchmarks, and identified any gaps in the effectiveness or efficiency of key systems, processes, and reports. The results of such a review can help CFOs gauge how much energy they will need to invest in the finance organization during their initial 6 to 12 months in office—and to fix any problems they find. Yet some activities should make almost every CFO's short list of priorities. Getting them defined in a company-specific way is a critical step in balancing efforts to achieve technical excellence in the finance function with strategic initiatives to create value. Given the declining average tenure in office of corporate leaders, and the high turnover among CFOs in particular, finance executives often feel pressure to make their mark sooner rather than later. This pressure creates a potentially unhealthy bias toward acting with incomplete—or, worse, inaccurate—information. While we believe strongly that CFOs should be aggressive and action oriented, they must use their energy and enthusiasm effectively. As one CFO reflected in hindsight, "I would have spent even more time listening and less time doing. People do anticipate change from a new CFO, but they also respect you more if you take the time to listen and learn and get it right when you act.". We strive to provide individuals with disabilities equal access to our website. If you would like information about this content we will be happy to work with you. Please email us at: Gaining credibility early on is a common challenge—particularly, according to our survey, for a CFO hired from outside a company. In some cases, it's sufficient to invest enough time to know the numbers cold, as well as the company's products, markets, and plans. In other cases, gaining credibility may force you to adjust your mind-set fundamentally. The majority of CFOs in our survey wished they'd had even more time with business unit heads. Experienced CFOs not only understand and try to drive the CEO's agenda, but also know they must help to shape it. CFOs often begin aligning themselves with the CEO and board members well before taking office. During the recruiting process, most CFOs we interviewed received very explicit guidance from them about the issues they considered important, as well as where the CFO would have to assume a leadership role. Similarly, nearly four-fifths of the CFOs in our survey reported that the CEO explained what was expected from them—particularly that they serve as active members of the senior-management team, contribute to the company's performance, and make the finance organization efficient (Exhibit 2). When one new CFO asked the CEO what he expected at the one-year mark, the response was, "When you're able to finish my sentences, you'll know you're on the right track.". By Bertil E. Chappuis, Aimee Kim, and Paul J. Roche. To gain the time for agenda-shaping priorities, CFOs must have a well-functioning finance function behind them; otherwise, they won't have the credibility and hard data to make the difficult arguments. Many new CFOs find that disparate IT systems, highly manual processes, an unskilled finance staff, or unwieldy organizational structures hamper their ability to do anything beyond closing the quarter on time. In order to strengthen the core team, during the first hundred days about three-quarters of the new CFOs we surveyed initiated (or developed a plan to initiate) fundamental changes in the function's core activities (Exhibit 3). CFOs can play a critical role in enhancing the performance dialogue of the corporate center, the business units, and corporate functions. They have a number of tools at their disposal, including dashboards, performance targets, enhanced planning processes, the corporate review calendar, and even their own relationships with the leaders of business units and functions. Compounding the pressures, companies are also more likely to reach outside the organization to recruit new CFOs, who may therefore have to learn a new industry as well as a new role. While no consensus emerged from our discussions, the more experienced CFOs stressed the importance of learning about a company's current performance dialogues early on, understanding where its performance must be improved, and developing a long-term strategy to influence efforts to do so. Such a strategy might use the CFO's ability to engage with other senior executives, as well as changed systems and processes that could spur performance and create accountability. Financial Officers' Turnover, 2007 Study, Russell Reynolds Associates. Supplement your day-to-day activities with no more than three to four major change initiatives and focus on them consistently. To make change happen, you will have to repeat your message over and over—internally, to the finance staff, and externally, to other stakeholders. Communicate your changes by stressing broad themes that, over time, could encompass newly identified issues and actions. One element of your agenda, for example, might be the broad theme of improving the efficiency of financial operations rather than just the narrow one of offshoring. The choice of information sources for getting up to speed on business drivers can vary. As CFOs conducted their value audit, they typically started by mastering existing information, usually by meeting with business unit heads, who not only shared the specifics of product lines or markets but are also important because they use the finance function's services. Indeed, a majority of CFOs in our survey, and particularly those in private companies, wished that they had spent even more time with this group (Exhibit 1). Such meetings allow CFOs to start building relationships with these key stakeholders of the finance function and to understand their needs. Other CFOs look for external perspectives on their companies and on the marketplace by talking to customers, investors, or professional service providers. The CFO at one pharma company reported spending his first month on the job "riding around with a sales rep and meeting up with our key customers. It's amazing how much I actually learned from these discussions. This was information that no one inside the company could have told me.". The act contains eleven titles, or sections, ranging from additional corporate board responsibilities to criminal penalties, and requires the Securities and Exchange Commission (SEC) to implement rulings on requirements to comply with the law. Harvey Pitt, the 26th chairman of the SEC, led the SEC in the adoption of dozens of rules to implement the Sarbanes-Oxley Act. It created a new, quasi-public agency, the Public Company Accounting Oversight Board, or PCAOB, charged with overseeing, regulating, inspecting, and disciplining accounting firms in their roles as auditors of public companies. The act also covers issues such as auditor independence, corporate governance, internal control assessment, and enhanced financial disclosure. The nonprofit arm of Financial Executives International (FEI), Financial Executives Research Foundation (FERF), completed extensive research studies to help support the foundations of the act. [. Internet bubble: Investors had been stung in 2000 by the sharp declines in technology stocks and to a lesser extent, by declines in the overall market. Certain mutual fund managers were alleged to have advocated the purchasing of particular technology stocks, while quietly selling them. The losses sustained also helped create a general anger among investors. The 2006 study indicated that, for 200 companies with average revenues of $6.8 billion, the average compliance costs were $2.9 million (0. Sarbanes–Oxley Section 802: Criminal penalties for influencing US Agency investigation/proper administration. Sarbanes–Oxley Section 1107: Criminal penalties for retaliation against whistleblowers. Securities Exchange Act of 1934, Securities Act of 1933, Employee Retirement Income Security Act of 1974, Investment Advisers Act of 1940, Title 18 of the United States Code, Title 28 of the United States Code. Title IX consists of six sections. This section is also called the "White Collar Crime Penalty Enhancement Act of 2002". This section increases the criminal penalties associated with white-collar crimes and conspiracies. It recommends stronger sentencing guidelines and specifically adds failure to certify corporate financial reports as a criminal offense. Elaine Chao and other dignitaries in the Blue Room at the White House on July 30, 2002. The bill, which contains eleven sections, was enacted as a reaction to a number of major corporate and accounting scandals, including Enron and WorldCom. The sections of the bill cover responsibilities of a public corporation's board of directors, add criminal penalties for certain misconduct, and require the Securities and Exchange Commission to create regulations to define how public corporations are to comply with the law. [. Securities analysts' conflicts of interest: The roles of securities analysts, who make buy and sell recommendations on company stocks and bonds, and investment bankers, who help provide companies loans or handle mergers and acquisitions, provide opportunities for conflicts. Similar to the auditor conflict, issuing a buy or sell recommendation on a stock while providing lucrative investment banking services creates at least the appearance of a conflict of interest. Germany (2002), South Africa (2002), France (2003), Australia (2004), India (2005), Japan (2006), Italy (2006), Israel, and Turkey. (See § Similar laws in other countries below.) [. xref 78 38 0000000016 00000 n 0000001682 00000 n 0000001818 00000 n 0000001935 00000 n 0000002459 00000 n 0000002495 00000 n 0000002608 00000 n 0000003500 00000 n 0000004268 00000 n 0000005098 00000 n 0000005938 00000 n 0000006534 00000 n 0000006704 00000 n 0000006880 00000 n 0000007712 00000 n 0000008355 00000 n 0000008969 00000 n 0000009368 00000 n 0000009538 00000 n 0000009621 00000 n 0000009883 00000 n 0000010515 00000 n 0000010774 00000 n 0000011049 00000 n 0000011436 00000 n 0000011548 00000 n 0000012547 00000 n 0000013325 00000 n 0000015975 00000 n 0000016012 00000 n 0000023071 00000 n 0000024799 00000 n 0000025990 00000 n 0000085687 00000 n 0000088205 00000 n 0000088482 00000 n 0000088948 00000 n 0000001077 00000 n trailer. FEI Survey (Annual): Finance Executives International (FEI) provides an annual survey on SOX Section 404 costs. These costs have continued to decline relative to revenues since 2004. The 2007 study indicated that, for 168 companies with average revenues of $4.7 billion, the average compliance costs were $1.7 million (0.036% of revenue). [17]. Stock options were not treated as compensation expense by companies, encouraging this form of compensation. With a large stock-based bonus at risk, managers were pressured to meet their targets. Sarbanes–Oxley Section 906: Criminal Penalties for CEO/CFO financial statement certification. Title III consists of eight sections and mandates that senior executives take individual responsibility for the accuracy and completeness of corporate financial reports. It defines the interaction of external auditors and corporate audit committees, and specifies the responsibility of corporate officers for the accuracy and validity of corporate financial reports. It enumerates specific limits on the behaviors of corporate officers and describes specific forfeitures of benefits and civil penalties for non-compliance. For example, Section 302 requires that the company's "principal officers" (typically the Chief Executive Officer and Chief Financial Officer ) certify and approve the integrity of their company financial reports quarterly. [6]. 745, enacted July 30, 2002), also known as the "Public Company Accounting Reform and Investor Protection Act" (in the Senate ) and "Corporate and Auditing Accountability, Responsibility, and Transparency Act" (in the House ) and more commonly called Sarbanes–Oxley, Sarbox or SOX, is a United States federal law that set new or expanded requirements for all U.S. public company boards, management and public accounting firms. A number of provisions of the Act also apply to privately held companies, such as the willful destruction of evidence to impede a federal investigation. [. Sarbanes–Oxley Section 401: Disclosures in periodic reports (Off-balance sheet items). Title IV consists of nine sections. It describes enhanced reporting requirements for financial transactions, including off-balance-sheet transactions, pro-forma figures and stock transactions of corporate officers. It requires internal controls for assuring the accuracy of financial reports and disclosures, and mandates both audits and reports on those controls. It also requires timely reporting of material changes in financial condition and specific enhanced reviews by the SEC or its agents of corporate reports. The Senate Banking Committee undertook a series of hearings on the problems in the markets that had led to a loss of hundreds and hundreds of billions, indeed trillions of dollars in market value. The hearings set out to lay the foundation for legislation. We scheduled 10 hearings over a six-week period, during which we brought in some of the best people in the country to testify. The hearings produced remarkable consensus on the nature of the problems: inadequate oversight of accountants, lack of auditor independence, weak corporate governance procedures, stock analysts' conflict of interests, inadequate disclosure provisions, and grossly inadequate funding of the Securities and Exchange Commission. [8]. In the interview cited above, Sarbanes indicated that enforcement and rule-making are more effective post-SOX. Boardroom failures: Boards of Directors, specifically Audit Committees, are charged with establishing oversight mechanisms for financial reporting in U.S. corporations on the behalf of investors. These scandals identified Board members who either did not exercise their responsibilities or did not have the expertise to understand the complexities of the businesses. In many cases, Audit Committee members were not truly independent of management.