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The 80 Percent Solution

Posted by Tim Reason | CFO.com | US

February 21, 2006 4:10 PM ET

According to today's Wall Street Journal (p C3), a group of "financial stars" including Arthur Levitt, Paul Volcker, John Bogle, John Biggs and Charles Bowsher recently sent a letter to the SEC and PCAOB urging them not to relax Sarbox 404 for small companies.

Despite diligent Googling, I can't find a copy of their letter (it doesn't yet appear in the SEC's comment section . But plenty of others do. The proposal, the Journal notes, would exempt 80 percent of public companies from at least some part of section 404. That's four out of five public companies. Maybe there was more that came out of that Roundtable last year than I recognized in my earlier post.

On a less momentous note, is anyone else struck by the change in the definition of "financial stars"?

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Sorry, I have not uncovered the letters you seek. However, I just finished talking to a principal at search firm Russell Reynolds, and he said something that relates to your "financial stars" comment.

That is, CFOs can no longer afford to focus on dealmaking or being the CEO's business partner without first doing the "blocking and tackling better." He was talking about getting the numbers right and being the board's fiduciary first and foremost.

That attitude is probably a microcosm of the larger market. Where, as of late, financial stars are not the big dealmakers or financial engineers, but truly the smartest guys in the room--the ones that are looking for transparency and solid financials.

Posted by Marie Leone | February 21, 2006 05:00pm


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