FASB strikes again!

The Financial Accounting Standards Board (FASB) is considering requiring corporations to provide more details about pension plan allocations, including alternative investments. FASB says it is responding to shareholder demands for more transparency so they can better gauge portfolio risks. At a meeting Feb. 13, the FASB board directed staff members to draw up proposed amendments to FAS 132 (Employers’ Disclosures about Pensions and other Post-Retirement Benefits) that would compel companies to list pension fund assets by categories, such as stocks, bonds and alternative investments, such as collateralized debt obligations (CDOs).

The increased use of alternative investments raised user concerns that “current disclosures of plan assets are not detailed enough to determine what types of assets are held in post-retirement benefit plans,” according to a FASB staff memo. “Disclosure of more specific asset categories would enable users to better assess the timing, uncertainty and amount of future cash flows related to an increase or decrease in the value of plan assets.”

Recommended amendments, according to a handout issued at the board meeting, would also force companies to reveal if risks are concentrated in individual companies, industries, countries or types of securities. It would also require certain disclosures about fair value measurements of plan assets similar to FAS 157.

Most interested parties, such as shareholder advocates and associations like Financial Executives International, decided to defer any praise or condemnations until they had more time to study what is being recommended. That should be available in a formal proposal slated to be introduced March 7, with a 45-day comment period to follow. Two months later, in July, FASB expects to issue guidance explaining any changes, which would take effect in fiscal years ending after Dec. 15, 2008.

Article found in Accounting/Financial Reporting, Retirement & Benefits

Executives know corruption when they see it—they just don’t know how to prevent it

While nearly two-thirds of 390 C-suite and board-level executives in 90 countries interviewed by PricewaterhouseCoopers LLP acknowledged having witnessed evidence of some form of corruption on their watch, only 22% expressed confidence that the risk management programs that their companies have in place are effective when it comes to identifying and mitigating that risk. Two problems were uncovered by the survey: The critical program element of rigorous risk assessment is more than half of the time left out of programs, and only a quarter of the executives surveyed said their companies perform pro-active risk assessment or monitoring. “Companies now have a compelling—and some might say, urgent—business case to support the development and implementation of a formal and strategic anti-corruption program,” says David Jansen, a PricewaterhouseCoopers partner.

In recent years, companies caught breaking anti-corruption laws have individually paid hundreds of millions of dollars in fines, suffered damage to their reputations and seen executives sent behind bars, Jansen says. The potential for corruption also hinders certain business opportunities: Nearly 45% of the executives surveyed noted that their company hadn’t entered certain markets or pursued certain prospects because of the likelihood of encountering corruption. They indicated that they feel particularly vulnerable in emerging markets, such as China, India, Russia and South America. They also feel that they have lost bids because of corrupt officials (39%) and their competitors pay bribes (42%).

The results are available in a report, “Confronting Corruption: The business case for an effective anti-corruption program.”

Careers

Exelon, the Chicago-based, $15.6 billion electric utility, has promoted corporate controller Matthew F. Hilzinger to senior vice president and CFO. Hilzinger, 44, succeeds John Young, who has accepted the CEO position with Energy Futures Holdings (formerly TXU). Hilzinger has served as controller since joining Exelon in 2002. Prior to Energy Futures, he was CFO of Credit Acceptance Corp. and controller at Kmart Corp.

JetBlue Airways Corp. has appointed Ed Barnes CFO of the $2.4 billion airline, based in Forest Hills, N.Y. Barnes, 43, was vice president of cost management and financial analysis. By 2007 he was named principal accounting officer and senior vice president of finance. Prior to JetBlue, Barnes served as CFO for Assisted Living Concepts Inc. He worked for Southwest Airline Co. and America West Airlines Inc. in various financial capacities.

Granite Construction Inc., the $3 billion, contractor and construction materials producer, based in Watsonville, Calif., appointed LeAnne M. Stewart CFO. Stewart succeeds William E. Barton, who is retiring after 28 years with the company. Stewart joins Granite from Nash Finch Co., where she most recently served as senior vice president and CFO. Previously, she held a variety of financial management positions with Enron Europe and Ernst & Young.

Pactiv Corp., the $2.9 billion food service and consumer packaging products company, with headquarters in Lake Forest Ill., has appointed vice president and controller, Walter T. Edwards, CFO. Edwards, 56, succeeds Andrew Campbell, who has announced his plan to retire mid-year. Walters has spent the past 32 years with Pactiv and predecessor companies serving in various financial capacities.

FPL Group, the $15.7 billion energy-related products and services, with headquarters in Juno Beach, Fla., has named Armando Pimentel to replace CFO Moray Dewhurst, who will step down at the end of the first quarter. Most recently, Pimentel was a senior partner in the regulatory and public policy group at Deloitte & Touche LLP. Previously, he assumed a variety of audit partner positions with clients in the financial services and energy industries. He also led Deloitte’s power and utilities segment. From 1996 to 1998, he worked in the office of the chief accountant of the Securities and Exchange Commission as a professional accounting fellow.

Dollar Thrifty Automotive Group Inc., the $1.6 billion parent company of Dollar Rent-A-Car and Thrifty Rent-A-Car brands, with headquarters in Tulsa, Okla., announced the departure of senior executive vice president and CFO Steven B. Hildenbrand. Hildenbrand is retiring after 21 years with the company. He joined Thrifty Rent-A-Car Systems Inc as vice president and treasurer. In 1989 he assumed the position of CFO, vice president and treasurer of Thrifty and Penstar Transportation Group. Prior to the initial public offering of Dollar Thrifty Automotive Group in 1997, he was named senior vice president and CFO. Six years later, he was appointed senior executive vice president and CFO of Dollar Thrifty Group.

Article found in Careers

Business Objects brings BI to the masses

Business Objects, an SAP division, has announced a major upgrade to its flagship business intelligence (BI) platform that moves BI from the purview of a select group of managers to a global audience of employees, suppliers and customers. XI 3.0 focuses on improved search and query capabilities, enhanced visual tools through shareable dashboards and immediate access across an organization and to business partners, according to Business Objects. Consultants have long viewed this communal intelligence, single intelligence platform as the next generation of BI technology.

What makes XI 3.0 unique, according to Business Objects, is the integration of text mining and information management capabilities, the addition of Web-based data sources and linkage of structured and non-structured data. One customer, Unisys, has high expectations for XI 3.0. “I expect that XI 3.0 will bring new insights and improved decision-making to our organization,” says Yvonne Jones, Unisys manager of data management. “Our employees should now always be connected to powerful BI capabilities wherever and whenever they need them.”

Business Objects, which was acquired by SAP in October in the ongoing business software consolidation, says the product will be available for installation next month. An on-demand version will follow.

Article found in Tools & Technology

RiskMetrics gives credit where credit is due

RiskMetrics Group has as added new features to its CreditManager solution that it says helps quantify overall credit risks, in the first in a series of scheduled product enhancements that extend the boundaries of credit risk software, says Ran Fuchs, head of RiskMetrics credit business.

The upgrade includes the ability to capture market exposure, rating changes and default risks within a value-at-risk framework, Fuchs, head of RiskMetrics credit business. CreditManager consolidates and compares risks and opportunities across a corporation’s entire credit business: bonds, credit derivatives and traditional lending such as commitments and letters of credit and, for banks, the retail business. Fuchs adds that CreditManager now includes enhanced stress testing, securitization exposure and a suite of advisory services.

Originally designed for financial services companies, such as banks and insurers, CreditManager is increasingly being used by nonfinancial corporations, says Fuchs. “This is part of the natural evolution of the methodology,” he says, noting how banks have often set the pace for breakthrough technology for financial risk management systems.

Article found in Credit Risk Management, Tools & Technology