ON THE RECORD

he take-away from Enron is that ethics and compliance professionals have a terribly important job to do, and there’s a lot more to be done. They still don’t really have the power to say no to a CEO or CFO. Compliance and ethics professionals need to be beholden to the board, not to senior management. They need to be empowered and protected. They ought to have employment agreements that cannot be terminated without the audit committee’s signing off. And audit committees ought to be recruiting compliance officers from other companies as members.”

—Joseph E. Murphy, partner, Compliance Systems Legal Group,
remarks at The Conference Board Ethics and
Compliance Conference, New York, May 11.

ON THE TUBE

W atch for “Andy Barker PI,” a new NBC prime-time comedy starring Andy Richter as a mild-mannered CPA. When he rents office space in a site formerly occupied by a detective agency, Barker immediately starts getting calls from people who mistake him for a private investigator. Instead of coming clean, he decides to take on some cases and embarks on a new career. Late-night talk show host Conan O’Brien is a cowriter and executive producer for the pilot.

SURVEY SAVVY

E mployers can help workers grow their retirement savings through a few simple strategies: introducing automatic enrollment in the company’s 401(k) plan, simplifying plan choices and better communicating the benefits. A May study by Hewitt Associates ( www.hewitt.com ) found that, in companies that had instituted automatic enrollment, the overall employee participation rate rose 14 percentage points.

Clearly, however, more work needs to be done. Although in 2005 the average 401(k) plan balance grew more than 10%, one-third of employees still did not participate in the plan—and one in five didn’t contribute enough to obtain the full company match. Those that contributed only nominal amounts, not surprisingly, were the younger, lower-tenured and lower-salaried employees.

SIGN OF THE TIMES

ooking for a new job that will be a real challenge? How about president of the United States?

Don’t let a lack of political expertise stop you—the American public appears to prefer to see a businessman get the nation’s top job. In a February FOX News/Opinion Dynamics Poll of 900 registered voters, 33% backed a business leader, 21% were rooting for a career politician and 21% stood behind a military leader.

GOLDEN BUSINESS IDEA

Business etiquette expert Barbara Pachter, author of When the Little Things Count…and They Always Count, says being polite helps build up “politeness credits.” Here are her suggestions for nine polite business practices:

1 | Use polite words. Simple words such as “please,” “thank you” and “you’re welcome” are the foundation of good manners.

2 | Write thank-you notes. It’s not enough to just say thank you for lunch, a gift or a job interview. A written acknowledgment does the job much better.

3 | Don’t put people down. A reputation for constant criticism will make business associates wonder what you say about them behind their backs.

4 | Don’t use offensive language. Don’t let curse words creep into your everyday speech.

5 | Greet people. A simple “hi,” “hello” or “good morning” when you encounter a coworker helps to make the work environment more pleasant.

6 | Don’t play practical jokes. Remember you’re in an office and not a school yard.

7 | Be considerate when sharing space and equipment with others. This covers everything from being aware of how much noise you make to cleaning up a conference room after a lunch meeting.

8 | Help others. Tomorrow you may need help from someone else.

9 | Disagree agreeably. You don’t have to agree with everyone, but you should respect their opinions.

ON THE RECORD

What is the state of MD&A disclosure? The staff in the SEC’s Division of Corporation Finance reviewed over 6,000 public companies’ filings last year. They tell me that generally, MD&A has improved. In many instances companies are better explaining their financial statements, providing and clarifying context and using MD&A to fill in some of those gaps in GAAP. ”

“ Despite this progress, there is still room for improvement. Some companies are doing an ‘elevator analysis’ without ample explanation. And some companies’ MD&A is still unnecessarily lengthy and not focused on telling the story clearly. ”

“ Management’s story would be more complete if it contained more forward-looking information, better explained trends and uncertainties that affect the business and discussed in more detail the business’ key drivers. ”

—SEC Commissioner Cynthia A. Glassman,
remarks at the 10th Annual Corporate Counsel Institute,
Washington, D.C., March 2006.

The number of public companies that went private in 2004—
up from 143 in 2001, according to the Government Accountability Office
(GAO)—due largely to the cost of Sarbanes-Oxley compliance.

BUSINESS TRENDS

Recruiting quality people has become a much more difficult task due to a strong labor market. When asked what their biggest short-term staffing hurdle was, accounting and financial professionals said:

Locating experienced people to fill open positions (42%)

Upgrading weak links in the staff (29%)

Retaining talent (20%)

Getting qualified candidates to accept job offers (9%)

Source: "2006 Ajilon Workplace Staffing and Workplace Trends Survey."

TOP TEN

1 | Hire carefully. Hire for attitude; train for skills. You are better off with an employee who has a good attitude and really wants the job than one with a bad attitude who may be more knowledgeable.

2 | Establish workplace standards. Communicate your expectations. Make it clear what is expected from dress code to telephone manners.

3 | Provide training. Offer opportunities for growth and development, and since your behavior sets the tone for the office, be careful to model the behavior you want employees to mirror.

4 | Recognize and reward high performers. Use incentive compensation to recognize and reward the employees and behavior that make your business successful.

5 | Weed out weak performers. Firing is painful but necessary. Retaining poor employees drains productivity.

6 | Invite employees’ input. Staff members know what’s really going on. Solicit their feedback.

7 | Communicate. Establish a regular schedule to keep employees informed and engaged.

8 | Deal with problems sooner rather than later. Do not delay in addressing a problem. With a positive tone, discuss the issue privately with the person and then, if appropriate, communicate a policy to the entire staff.

9 | Develop strong processes. Cross-train employees and document procedures so anyone can be replaced.

10 | Treat employees consistently. Problems arise when staff members are treated differently for vacations, overtime, holidays and continuing education. An employee handbook clearly establishes the policy for everyone.

Source: Jean D. Sifleet, CPA, JD, Clinton, Mass., www.smartfast.com .

BUSINESS TRENDS

L ike the corn in Oklahoma, gas prices are as high as an elephant’s eye this summer—and that’s a hardship for those who do a lot of driving for their employers. The IRS already has upped the deduction unreimbursed travelers can take to 44.5 cents a mile. Now some public companies, including BellSouth and UPS, are following suit. In a recent survey by the Society for Human Resource Management, one in five respondents said their companies already have begun or are planning to soon raise reimbursement rates to the IRS level.

SURVEY SAVVY