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Warming to the Debate

The Bush Administration must clean up its (environmental) act, writes a reader. More letters: standing by Six Sigma; cultivating attention to detail; putting deferred comp in its place.
CFO Staff, CFO Magazine
May 1, 2007

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It's time the Bush Administration and the Environmental Protection Agency followed the law and cleaned up their act ("Cleaning Up Carbon," April). They can no longer reject global warming as a hoax. There are real problems with greenhouse gases, and as Americans, we should do our part to make sure we reduce unnecessary CO2 emissions to stop the erosion of our planet.

John Fodge
Via E-mail


I was surprised to read in your article on global warming that "equally as certain is that businesses [are] the primary generators of greenhouse gasesÂÂ…." A recent article on global warming stated that man may produce as much as .24 percent of all the alleged greenhouses gases emitted into the environment. The majority of such gases are produced naturally with the help of the sun, which is about 330,000 times Earth's mass. Maybe the sun has something to do with global warming?

If you want some excellent information on global warming, watch the BBC documentary "The Great Global Warming Swindle." Most of the PBS stations will not show it, but it can be viewed on YouTube.com. Another good reference is Chris Horner's new book, The Politically Incorrect Guide to Global Warming and Environmentalism. Horner agrees that global warming is taking place, but notes that the alarmists fail to see that we were warming up for more than 400 years before we had automobiles.

One thing is certain about the global-warming alarmists: they want to tax us into a recession (or depression), and the results of the taxing will have done little to stop Mother Nature — or China, India, and Mexico — from making more greenhouse gases.

Frank A. Dusek
Weiss, Sugar, Dvorak & Dusek Ltd.
Chicago

The Author Responds: Yes, the sun is the biggest cause of greenhouse gases (mostly, I believe, water vapor). And yes, the sun is also a contributor to global warming, as you state. But are you suggesting that some change in the intensity of the sun — or its magnetic force — is contributing to the rising temperatures on the planet? If so, I'd be interested in knowing what that is.

So would the members of the UN Intergovernmental Panel on Climate Change. In their exhaustive study, they found that global atmospheric concentrations of CO2, methane, and nitrous oxide have increased markedly as a result of human activities since 1750 — and now far exceed pre-industrial values going back thousands of years. The primary cause of the CO2, according to their recent report, is fossil-fuel use and land-use change. What's more, the panel found that man-made effects had more than twice the impact on global average radiative forcing — the trapping of heat — than solar irradiance.

As for the "taxing us into recession" argument, some historical perspective may be useful. Business leaders made a similar argument in the late 1980s, when the (first) Bush Administration introduced legislation targeting reductions in emissions of ozone, carbon monoxide, and other particulate matter. Since the passage of amendments to the Clean Air Act, the amount of those smog-producing gases has been reduced dramatically. Meanwhile, the 1990s proved to be one of the greatest economic boom times in U.S. history.


Is Six Sigma the Way?

I am writing in response to the article "Six Stigma?" (Topline, March). The article refers to the so-called study by QualPro that purports to show that most companies using Six Sigma are doing poorly relative to the average firm. In fact, QualPro has never released any details or data, so its research cannot be validated.

Serious academic research has been done on the effectiveness of Six Sigma's parent methodology, total quality management (TQM), and has found that firms that deployed TQM enjoyed improved stock performance, operating income, sales, and other benefits when compared with their non-TQM counterparts.

I don't believe Six Sigma is necessary — let alone sufficient — for business success. Many great firms do very well without it. But companies don't have to choose between innovation and process excellence. In fact, barring some freakish competitive advantage such as dirt-cheap labor or a government monopoly, no company that ignores process excellence is successful in the long run. The tendency of American companies to latch onto a single aspect of business is misplaced and makes management appear unstable as it careens wildly from initiative to initiative.


Thomas Pyzdek
Author, The Six Sigma Handbook
Via E-mail


The Art of "Presence"

In terms of how cultivating "presence" helps accelerate results ("Being Here," Insight, March), I'm reminded of the approach used by a coach of world-class sprinters. He had his runners observe every movement they made to launch themselves off the starting block. Their minute attention to each movement initially slowed them down. The cynics among them surely had a field day with this. However, the coach's wisdom soon won out. Within a short period of time, each runner learned an economy of movement that actually bettered their speed. This called for trust and, for many, a step to and beyond the edges of their comfort zone. But the return on investment from coaching in this arena is well worth it.

Jeremy Nash
Via E-mail


Putting Deferred Comp in Its Place

"Reams Deferred" (Topline, March) leaves the impression that nonqualified deferred compensation is something new, or that it is proliferating wildly. Nothing could be further from the truth.

Various forms of nonqualified deferred compensation have been around for at least the 27 years that we have been in the executive-compensation consulting business, and these programs are currently under extreme pressure from the Internal Revenue Service in the form of its rules under Section 409A of the Code.

The government is cracking down on all forms of nonqualified deferred compensation to ensure that it collects its tax proceeds sooner rather than later (that is, where noncompliance has occurred). In other words, if strict compliance with the tax code is not followed in the design and administration of deferred-compensation plans, executives risk the nasty surprise that their deferrals will be currently taxable, even though the compensation is yet to be received.

Certain purveyors of these plans like to give the impression that "everybody has it, so you must have it too." Properly designed deferred compensation certainly has its place in the overall scheme of executive pay, but as with anything in this world of commerce, we must say, "Buyer Beware."

Greg Keshishian
Managing Partner
GK Partners Inc.
New York


Correction:

In the February Topline article "Fear of FIN 48," Marian Rosenberg was referred to as a tax analyst for Thomson Financial. She is actually a tax analyst for Thomson Tax & Accounting.




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