The Price of Terrorism: No Insurance

Remember the fuss the insurance industry made about the need for a federal backup for terrorism risk insurance?It turns out that the Terrorism Risk Insurance Act that insurers managed to wrangle from the government last year hasn’t been much help in making coverage more available or reasonably pr...

By David Katz • June 2, 2003

Congress, FASB in Stock Option Flap

They’re at it again.A bill that would temporarily prohibit regulators from recognizing standards requiring companies to expense employee stock options gets an airing this week — much to the chagrin of members of the Financial Accounting Standards Board.On Tuesday morning, the House Financial Serv...

By Craig Schneider • June 2, 2003

Trash-Talk

“There can be no question that we are at war,” Home Depot CFO and executive vice president Carol Tomé told a recent conference of finance executives. The combat, of course, is with Lowe’s — the fastest-growing company in the home-improvement industry, which Home Depot dominates. And Tomé startled...

By Roy Harris • June 1, 2003

Natural Performers

When it comes to currency risk, companies are going natural. No, that doesn’t mean they’re exposing themselves completely to risk. They are forsaking derivatives for natural hedges — matching revenues and costs for the same currency or offsetting losses in one currency with gains in another.There...

By Ronald Fink • June 1, 2003

Fear Factor

Rick Navarre wanted the audit committee at Peabody Energy to know exactly how he is managing risk at the company. As Peabody’s CFO, Navarre developed a comprehensive methodology for analyzing and quantifying risk, in large part to educate the audit committee about all the risks confronting the $2...

By Russ Banham • June 1, 2003

Exchanges: We Can Meet Our Own Standards

Officials at the major U.S. stock exchanges reported to the SEC last week that corporate governance practices at the bourses themselves were either on a par — or would soon be on a par — with the governance standards required of companies listed on the exchanges.Richard Grasso, New York Stock Exc...

By Craig Schneider • May 19, 2003

FASB Holds Fast on Options

It’s likely going to take a lot more than a roundtable discussion of lawmakers, executives and accounting rulemakers, to reverse an interim decision that requires companies to treat stock options as an expense.Certainly, the Financial Accounting Standards Board showed no signs of making a regulat...

By Craig Schneider • May 12, 2003

Sarbox or Sarboon?

While the Sarbanes-Oxley Act of 2002 has increased the workload — and hazards — for CFOs, the legislation could also be something of a boon to finance chiefs. How’s that?For openers, the added compliance risks that CFOs are now shouldering could make them a more valuable commodity in the job mark...

By Marie Leone • May 9, 2003

Stock Options: How Do You Attribute ‘Em?

(Editor’s note: RegWatch is a new column that will run every Monday on CFO.com. To receive the article by e-mail each week, click here.)It seems there’s plenty of time to keep the debate raging over whether and how to treat employee stock options as an expense.The Financial Accounting Standards B...

By Craig Schneider • May 5, 2003

Misery Loves Another Company

Federal-Mogul Corp. had already recognized a $1.6 billion liability for asbestos-litigation costs when it filed for bankruptcy. But that expenditure got it no closer to ending these liabilities. The nature of asbestos claims is such that companies rarely solve their problem, no matter how much th...

By Kris Frieswick • May 1, 2003

What You Don’t Know about Sarbanes-Oxley

If all goes well, FirstEnergy Corporation just might dodge a major financial reporting bullet. All management needs to do is meet its planned June 1 deadline for overhauling the company’s computer system.That’s because the Securities and Exchange Commission isn’t likely to have gotten around to d...

By David Katz • April 22, 2003

Property Insurance Premiums to Drop: Survey

There’s been a seemingly endless parade of bad news coming from Corporate America. But here’s some rare good news.A new survey by Aon Corp., the world’s second-largest insurance broker, indicates that prices for U.S. commercial-property insurance have begun to steady—and in some cases, even come ...

By Jennifer Caplan • April 8, 2003

War Dance: Will SEC Go Light on DOD Contractors?

It’s been a long time — 18 years, to be exact — since the CFO at a high-profile defense contractor resigned because of a dog. But Peter Stockton remembers it like it was yesterday.In the spring of 1985, Stockton, then chief investigator for the House Energy Commerce Committee’s subcommittee on ov...

By Craig Schneider • April 7, 2003

Choosing Suppliers: Vendor Bender

How do companies decide which IT suppliers to do business with? That depends on who’s doing the deciding — and on who’s assessing corporate practices.According to Jupiter Research, non-IT executives tend to favor companies whose products meet business requirements, while IT executives put the emp...

By Scott Leibs • April 1, 2003

Holes in the Net?

The scary thing about the demise of Reliance Insurance Co. was the sheer speed of it. As recently as December 1998, the property/casualty company was reporting a $1.7 billion statutory surplus, the biggest in its 181-year history. That same year, Reliance also boosted its profit to $585 million, ...

By David Katz • April 1, 2003

Fraud Squad

U.S. Attorney Patrick Meehan hasn’t yet caught any companies engaging in the fraudulent accounting tactics that Enron used to boost revenues. But should one turn up in the Philadelphia jurisdiction where Meehan represents the Department of Justice, well, he wouldn’t be sorry.“I’m not wishing that...

By Alix Stuart • April 1, 2003

Survey: Health-Insurance Crisis Looming

In case you’re still not convinced that health care is the next great corporate crisis, read on.According to a nationwide survey of 600 large and small businesses, 92 percent say they are likely to increase the amount their employees pay for health-insurance premiums next year.The study was part ...

By Stephen Taub • March 18, 2003

Who’s Buying How?

How do companies decide which IT suppliers to do business with? That depends on who’s doing the deciding — and on who’s assessing corporate practices. According to Jupiter Research, non-IT executives tend to favor companies whose products meet business requirements, while IT executives put the em...

By CFO Editorial Staff • March 17, 2003

Under Pressure

Last year, in a speech before the American Society of Corporate Secretaries, the Securities and Exchange Commission’s Cynthia Glassman took the corporate-governance group for a not-terribly-invigorating walk down Memory Lane. “The public eagerly sought stocks of companies in certain ‘glamour’ ind...

By Scott Leibs • March 17, 2003

Enron Scandal, the Sequel

Enron Corp. is in a mess of legal trouble again.Two financial executives with Enron Broadband Services were arrested Wednesday in connection with a new accounting scandal at the bankrupt energy company.The Department of Justice charged Kevin Howard, the former chief financial officer of Enron Bro...

By Stephen Taub • March 13, 2003

Dial ”M” for Malfeasance

According to a recent report by The Association of Certified Fraud Examiners, organizations lose about 6 percent of their revenue to occupational fraud and abuse. The study also noted that occupational fraud was most commonly detected by a tip from an employee, customer, vendor, or an anonymous s...

By Craig Schneider • March 12, 2003

Return to Sender?

Corporate targets of class-action lawsuits, such as securities-litigation or product-liability cases, have long argued that plaintiffs’ lawyers stand to gain exponentially more than the members of the class. Indeed, plenty of the money won in settlements never gets to those who have been wronged....

By Joan Urdang • March 1, 2003

The Untouchables

Whistle-blowers who report suspected violations of securities laws now have broad protections under the Sarbanes-Oxley Act of 2002 — so broad, says employment attorney Michael Nosler of Denver-based Rothgerber Johnson & Lyons LLP, that companies should treat any employee who voices a concern ...

By Tim Reason • March 1, 2003

Two Weeks in January

Resigning his post as Securities and Exchange Commission chairman on November 5 did nothing to keep Harvey Pitt from being the center of controversy. First, of course, he didn’t leave. Then, two months later, the lame-duck chairman presided over what he described as “the busiest two weeks of rule...

By Tim Reason • March 1, 2003

The Prime of Ms. Nell Minow

For most of the past 16 years, shareholder activist Nell Minow has felt like a cross between Chicken Little and the Little Red Hen. Her calls for reforming corporate governance have often been spurned by companies and ignored by shareholders. “It’s been like crying, ‘The sky is falling — and who ...

By A CFO Interview • March 1, 2003