CFO Europe welcomes your letters. Send them to: The Editor, CFO Europe, 26 Red Lion Square, London WC1R 4HQ, UK.
Email us at email@example.com, or contact a specific author by clicking on his or her byline. You can also post a comment directly on CFO.com by clicking on the appropriate link at the end of any article.
Please include your full name, title, company name, address, and telephone number. Letters are subject to editing for clarity and length.
You’re right to pull the Swiss government up on its lack of attention to detail during recent changes to company audit law (“Sarbanes in Switzerland?” February).
The changes, proposed by the Ministry of Justice, were passed by the Swiss Federal Parliament in late 2005. They included an audit of the functioning of internal control (over financial reporting), similar to the infamous section 404(b) of the Sarbanes Oxley Act.
Section 404(b) kicked in for large accelerated filers in the US for the fiscal year 2004, which meant audits were carried out in early 2005. This single change pushed audit fees up by 50%, as reported in several studies including one by Financial Executives International.
Had the Swiss Ministry of Justice bothered to consider the US experience, it would have advised parliament to strike the additional audit of internal control from the bill. This didn’t happen.
Instead, the Swiss have ended up with an internationally unique and untested provision to audit the “existence” of internal controls. Not only that, the new law applies to public and private companies, hitting small and medium-sized firms alongside larger listed counterparts. This, despite the fact that large companies in the US have had a bad experience with section 404(b). It’s hardly evidence of that famous Swiss efficiency.
Swiss companies have had to comply with the new law from January 1st 2008. It will be interesting to see how much audit fees in Switzerland increase this year.
It’s encouraging that there is a growing body of research showing a link between “employee engagement” and the bottom line, as discussed in “Above & Beyond” (February). And importantly, some of the research about this nebulous topic is based on a mixture of qualitative and quantitative data, giving a full picture of workforce performance. This includes research at HR consultancy Mercer, which has found a ROI in people management strategies. It has done this through statistical mapping, recording not only engagement and performance, but also employee behaviour, such as responses to performance incentives, using data from HR and payroll systems.
More needs to be done at the corporate level. By working with a broad base of customers, we’ve observed that many companies addressing human capital management do so either by 1) looking at trends derived from hard data on areas such as pay, absence and turnover or 2) working with data that measures “softer” indicators such as engagement. In our view, companies need to do both. Deployed together, these two approaches will provide CFOs with powerful business intelligence of fundamental importance to their companies’ future performance.
Director, HR Services and Line of Business, Logica
Editor, Payroll World
Not the End of the World
Luckily for most CFOs, “Give and Take” (March) recounts an unusual situation about botched CFO hirings. But, as a recruiter, I’m constantly amazed by the number of organisations that fail to insist their search firms thoroughly check the references of a candidate during the recruitment process. Taking this precaution can help prevent companies landing themselves in the uncomfortable position of having to revoke an employment offer at a late stage.
In most cases, however, CFOs can rest easy that a revoked offer will not hinder their chances of landing other jobs. There are times when a U-turn is not their fault and CFOs need to make this clear. As in the case of Rod Holdsworth, who lost the CFO post at Bovis Lend Lease, a sudden change of leadership or ownership can result in a company backtracking on an appointment. The same thing can occur when a company’s financial circumstances change — this tends to happen most in banking, where macroeconomic changes often trigger a move to reduce headcount.
CEO, Green Park Interim & Executive Resourcing