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Thank you so much for your timely article on the business case for social
responsibility (“Virtue Rewarded,” October). It is gratifying to know that company
executives, especially chief financial officers, are increasingly aware of just
how important social responsibility is.
As part of the larger socially responsible investing movement — now representing
more than $3 trillion in assets — the General Board of Pension and
Health Benefits of The United Methodist Church has long been advocating for
greater social and environmental accountability among many of the country’s
major companies. We do so because we believe that corporations focusing on
short-term profitability, to the detriment of long-term sustainable business
practices, are not good investment choices. It is our experience, and belief, that
strong financial returns go hand-in-hand with strong social returns. For us,
sensitivity to a company’s social responsibility is an essential element of our
fiduciary duty to our plan participants.
The General Board of Pension and Health Benefits, the largest denominational
pension fund, with approximately $15 billion in assets, uses traditional
shareholder advocacy tools to encourage companies to be more socially
accountable. Just this year, we have urged as many as 20 companies to adopt
better corporate-governance practices, to maintain high vendor standards, to
label genetically modified foods, to report on issues relating to global warming,
to guard against predatory lending, and to embrace sustainability. These
issues, reflecting our specific religious tradition, with its emphasis on stewardship
and justice, are at the very heart of how companies operate and perform.
As more executives come to understand that financial returns and social
returns are not mutually exclusive, stakeholders everywhere will benefit. Thanks for telling this important story.
David H. Zellner
Chief Investment Officer
General Board of Pension and Health Benefits
The United Methodist Church
I thoroughly enjoyed your article on corporate responsibility.
We call ourselves a “triple bottom line” company and
have strict measurements around what we do. We thought
we were alone!
Go Ahead, Buy that Dream House
Great article on the value of self-directed
individual retirement accounts
(“A Chance to Direct,” October). However,
there were a couple of misconceptions
I’d like to bring to your attention.
An IRA owner may invest in a sibling’s business, since siblings
are not disqualified persons according to the Internal Revenue
Service. Of course, all those transactions should be market
rate and aboveboard.
You may also buy the beach house you are in love with,
as long as you don’t use it while it is held by your IRA. You may
rent it. When you are eligible for distributions, you may petition
the IRS for a waiver to allow you to purchase the property from
your plan (not usually allowed, but it may be granted if you can
show that the IRA would benefit the same as if it were sold to a
non-disqualified third party), you may take it in partial distributions
over several years, or you may take the entire property at
once as a distribution.
Transactions are not as complicated as they seem if you
deal with an administrator that guides you through the process.
Jaime J. Raskulinecz
Entrust Northeast LLC
Verona, New Jersey
Thanks for the Road Map
We have been on an adventure in unassigned seating over the
past 18 months, and I really wish that your valuable real-estate
report had been available at the outset of our journey (“Take My Desk — Please,” October). I can assure you that your article mirrors
well the experiences that we have had. I also appreciate the
insights from companies that are further down this road.
Orange Business Services
I read with interest the article “Take My Desk — Please” about
how reconfiguring office space can save companies money. However, these companies may end up dishing it out elsewhere.
The first thing I noticed was the picture on page 100 of a woman
slumping in an easy chair with her laptop, in the worst possible posture. It may sound
inviting to give up our ergonomically correct
desk chairs for a comfy sofa, but the
company may soon end up with more employees’ medical bills
for shoulder and back pain, migraines, and sinus and breathing
problems. And unless lockers are allocated for employees, they
can hurt themselves carrying everything around to a new spot
each day. What’s more, functioning with earpiece phones instead
of desk phones can lead to more-frequent ear infections as no
doubt people will not clean them often enough.
Add to the bills and lost work time the suggestion to consider
a totally paperless environment, which makes us totally
dependent on computers. Anyone who has ever worked in an
office that depends mostly on computers, with no files to run to
for backup, is aware of the consequences of a computer crash.
Who’s Minding the Store?
The same U.S. Congress and Administration that passes the Sarbanes-Oxley Act and holds hearings to hold corporate executives
accountable for their misdeeds hides behind cash-basis
accounting to mislead the American public (“Deficit Retention Disorder?” Topline, October).
In addition, this same group misdirects funds that should
be going to the small businesses that support the U.S. economy
to large companies (such as Halliburton) that have the Administration
and members of Congress in their pockets. It’s no wonder
that so many MBA students think it’s OK to cheat to get ahead!
The current Administration and Congress should be held
accountable for such outrageous behavior, but, since they are the
ones “minding the store,” it will never happen.
Henry L. Wilson
“Deficit Retention Disorder?” describes the kind of financial wizardry
that caused Congress to strip former Washington, D.C.,
mayor Marion Barry of most of his mayoral authority and
appoint a board to run the city’s financial affairs. Since there is
no über Congress to do the same to the U.S. Congress, may God
help us all.
What Lies Ahead
“Delayed in the USA” (September) was outstanding in its presentation
of the [infrastructure challenges] facing the United
States in the coming years. Two issues remain: how fast can we
close the gap and who has a solution set to focus on potential
John A. Deasy
Breaking the Spending Cycle
I found “The Money Bowl” (August) to be fascinating and well
written. I think that breaking the spending cycle lies in the hands
of the consumer. As you know, a major source of revenue comes
from broadcasting rights, whose media providers sell advertising
slots. Consumers would have to stop supporting those agencies,
so the problem seems quite unsolvable.
When Will They Learn?
Last spring you published a letter from me regarding some of
the problems with upper-level executives being out of touch
with reality (“Through Shareholders’ Eyes,” Letters, March).
Recently, we saw the results of another backroom deal
that surfaced with UnitedHealth Group and its backdating of
stock options. Although one news report stated it may not be
illegal, in anyone’s mind it is unethical. They were caught; how
many others have not yet been caught on this or other issues?
When will companies learn that these practices are not
acceptable? Is anyone worth the salary and stock options these
executives get? Why don’t the companies give the options to the
common workers who have earned the profits for the companies —
not to those sitting in the ivory tower?
Gordon S. Knudson CPA
In “Topping the CFO,” a sidebar about pay levels for finance specialties that accompanied the November compensation feature, “Pay Up,” the rise in controller salaries was incorrectly given. The correct figures for the increase are: from $151,500 in 2003 to $184,300 in 2005.