Now that companies must meet strict new reporting guidelines, who's leading the effort to comply with the Sarbanes-Oxley Act of 2002?

Apparently, it depends on who you ask.

According to a recent survey of CFOs, CEOs, board members and operating executives (conducted by Research International on behalf of Deloitte Consulting and BusinessWeek), 63 percent of CFOs believe they are responsible for complying with the new corporate-governance regulations.

Just 13 percent of the finance chiefs in the survey -- which polled directors and officers of S&P 1500 companies -- said they believe the chief executive officer assumes this role.

But a mere one-third of CEOs (and 30 percent of board members) believe the CFO currently leads in complying with the new rules.

In fact, 47 percent of CEOs surveyed say they are responsible for compliance with Sarbanes-Oxley, and 40 percent of board members agree with that assessment.

All of the executives did agree that their companies would benefit if finance chiefs played more of a strategist role to help set the course of business performance.

"The survey sounds the alarm for today's CFO to take action," says Mike Ippolito, partner of Deloitte Consulting and a leader in the firm's strategy and operations practice that focuses on business transformation. "The findings demonstrate that the CFO is pivotal to restoring public trust and that the CFO can serve as an important bridge between the CEO and the board on governing matters."

Just as the CFO must dare to dissent when necessary, Ippolito believes the CFO must serve the CEO with effective insight on the affairs of the company and its businesses. "The best practice is to balance both steward and strategist roles within the CFO function, rather than attempt to surgically separate the two and risk the viability of both," he notes.

Deloitte pointed out in the survey that historically the CFO has been more of a steward --with authority over financial processes -- than a strategist. CEOs and CFOs have different opinions on the ideal role of the chief financial officer, however

Nearly half of CEOs believe that the CFO should ideally be a strategist. But only 35 percent of CFOs see strategy as an ideal position for themselves. Rather, 47 percent seek a "balanced" role ,and only 18 percent see themselves as ideal stewards.

Conversely, all groups surveyed were in agreement that the current regulatory environment encourages the CFO to play a steward role in the future.

The survey also asked CFOs about job satisfaction.

For example, a whopping 93 percent of CFOs said their job is more difficult under Sarbanes-Oxley and its heightened reporting requirements. (To find out about the hidden traps in that piece of legislation, read "What You Don't Know About Sarbanes-Oxley.")

The increased scrutiny does not have many finance chiefs considering a career change, however. Just one in nine said they seriously considered leaving their job in the last two years.

One possible reason: Eighty-seven percent of CFOs think their pay will rise in the next two or three years, whether or not they take on added responsibilities.

All survey participants agreed that board audit committees will continue to assert greater authority in governance matters. One worrisome disconnect: only 47 percent of CFOs thought that audit committees were "deeply qualified." By contrast, nearly 61 percent of board members and 69 percent of CEOs said audit committees were up to the task.

In addition, about 88 percent of CEOs and board members agreed that the CFO should be directly involved in governance authority. Around ninety-six percent of CFOs agreed with this viewpoint.

On the controversial question of whether the role of CEO and chairman should be split, 49 percent of the CEOs agreed that their roles should be separate from the chairman role, as did 45 percent of CFOs.

Spiegel Settles With SEC
The Securities and Exchange Commission settled charges with Spiegel alleging the catalogue retailer withheld material information from the public.

Spiegel consented to the arrangement without admitting or denying the SEC's allegations.

Last month, Spiegel management announced that the SEC had launched an "informal investigation" into the conduct of the company and its officers and directors as well as into the company's compliance with its disclosure obligations. The probe stemmed, in part, from Spiegel's failure to file financial reports on time.

In early February James R. Cannatar resigned as CFO of the catalogue specialist one day after the company's auditor, KPMG, said there was substantial doubt about the company's future after it failed to comply with some of its debt agreements.

The SEC's complaint alleges that, at the beginning of last year, Spiegel did not report that the company's independent auditor had notified the company that it may not be able to continue as a "going concern."

• 1
• 2
• next »