Enron pair go on trial

[Rambuchan]

I'm probably missing out on something here then. Sarbanes-Oxley is great for financial transparency but it does not change or temper the imperative I mentioned. Or does it?

 

[Lambert Simnel]

I'm probably missing out on something here then. Sarbanes-Oxley is great for financial transparency but it does not change or temper the imperative I mentioned. Or does it?

In our place, and in those I've met at SOX Round Tables etc (boy, those are fun....) there has to be an element of the control environment which addresses "Tone at the Top" - this covers the checks and balances at the top of the company, and the general mood and tone set by the chief exec.

Further, the "internal controls over financial reporting" so beloved of SOX need to address the possibility of fraud, as well as accuracy of financial reporting.

Thus the profit / share price imperative is still there, but it is tempered (good choice of words) to an extent.

 

[Rambuchan]

It seems more wideranging than I first thought. I'm glad I'm only a broker and not subject to this stuff myself, but it seems a worthwhile and necessary burden. Thanks for clearing it up a bit more.

 

[Whomp]

It seems more wideranging than I first thought. I'm glad I'm only a broker and not subject to this stuff myself, but it seems a worthwhile and necessary burden. Thanks for clearing it up a bit more.

Like I said earlier Ram the pendulum swings both ways. I know of two CFO's who have decided to leave their publicly traded companies and move to the private sector. Their focus was on managing the regulatory environment and not on improving the business. Very frustrating for them.

 

[Lambert Simnel]

ITV took the step of buying out all of their US shareholders (actually very few, and due to an acquisition of some sort, I believe), delisting, and deregistering from the SEC. Expensive, but less so than SOX compliance, they reckoned.

You can only do that as FPI if you can afford to ignore the American market, of course - otherwise you get seen as a niche player.

@Whomp - prolly just a terminology thing, but I guess you mean the privately owned sector, rather than the private sector ? Frankly, I think that's a wimp's approach for a CFO. If you reckon you're good enough to play in the big leagues, then you should be able to deal with Sarbanes-Oxley as a CFO. It's kind of like asking to get put back down to triple-A cos your batting average looks better.

 

[Whomp]

Lambert I am saying a privately held business vs publicly traded (No public shareholders). These CFO's felt their jobs were fully focused on their short term filings rather than long range planning. The companies they went to work for are amongst the largest privately held firms in the U.S. where they could focus on business and not the regulatory environment. Wimpy? Maybe. Minor Leagues? Hardly.

 

[Lambert Simnel]

I think we'll just have to agree to disagree, Whomp. The additional complexities facing a publicly quoted company makes a CFO's job there far more challenging. Someone who can hack it as a CFO in a publicly quoted company could virtually always manage the restricted set of responsibilities in a privately held one, but the converse is certainly not true.

 

[Whomp]

Maybe that's the best then to agree to disagree.

But one more thought and then I'll zip my piehole.

They as well as I see it as an unnecessary challenge. What value does filing certifications contribute to running the business? Zip. Publicly traded CFO's cash on the books is running at 30 year highs. Historically it averages about 6% and now it's at 9%. Shouldn't this be a priority not certifications?