Corporate Finance Review

About the Publication:
Monthly, subscription-based magazine written as a resource for top finance professionals. Content includes the latest on corporate restructuring and downsizing, initial public offerings, institutional ownership and corporate governance, as well as covering trends in finance, risk and return. Corporate Finance Review is the essential resource for senior finance professionals. Published six times a year with a comprehensive mix of articles from both corporate and academic contributors, this journal offers the cutting edge of financial theory as well as new developments in the corporate world. For more information and subscription click here.


Articles By Hank Boerner:
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	Key Issues to Watch in Proxy Season 2008 (March/April 2008) Lead Paragraph:It's become an annual event that institutional investment managers, their consultants/advisors, and financial analysts eagerly look forward to: The RiskMetrics Group's annual proxy season review and preview: a review of the critical issues and events of 2007 and a look at what is on the table for proxy season 2008. The conference was entitled "2008 RiskMetrics Group US Governance Conference" and was held in New York City. What was set out for investors in the conference is of critical importance to financial executives.
	2008: Another Year of Tremors and Seismic Shifts for Finance Professionals? (January/February 2008) Lead Paragraph:Those who live in earthquake fault zones, such as the Pacific Rim, know all about earthquakes and the sudden shaking of buildings and highways. The frightening shifts of the earth's crust occur as tremendous pressure is released by the grinding of massive textonic plates far beneath the ground. Unseen, these events often occur without advance warning; at other times, warning signs will be there, and you ignore them at your peril. Earthquakes can create wide swaths of damage on land; if they occur in the seabed, deadly tsunamis may strike distant shorelines.
	In a Blink: Research Is Confirming Key Trends in Finance, Corporate Reporting, and Capital Markets (November/December 2007) Lead Paragraph:You were certain you knew a particular thing, but the thought needed confirmation. However, there was no time for fact-finding or research. Acting on a hunch you mad a necessarily quick decision. Was your hunch right? Most often the answer is yes, our hunch was correct and the right course was take. The best-selling author Malcom Gladwell captured the power of human hunches and intuition in his book, Blink: The Power of Thinking Without Thinking.
	Your Company's ESG - Environmental, Social, and Governance Factors Are Mattering More Now to Institutional Investors (September/October 2007) Lead Paragraph:The financial executive's daily conversations are studded with abbreviations and acronyms - CEO, CFO, ROI, SEC, FASB, PCAOB, LBO, CDO, ROE, and many more. Add this to your collection: ESG. Chances are an increasing number of the investors and financial analysts on the buy-side who analyze your firm are considering or actually measuring your organization's ESG along with other factors in their buy-sell-hold decision making.
	Proxy Seasons: Observation Posts for Institutional Investor Concerns (July/August 2007) Lead Paragraph:Proxy seasons have become excellent observation posts for examining institutional shareholder concerns. In proxy matter, there are now more players and more power exerted (and exhibited) by a growing corps of shareholder-activists; more exposure of individual players (especially CEOs and directors) in public-opinion crosshairs; more media coverage of proxy campaigns, including votes for the previously invisible board-of director candidates; and more involvement of high-profile public-policy figures in campaigns (such as New York City Comptroller William Thompson, California State Treasurer Bill Lockyer, Connecticut State Treasurer Denise Nappier, and others).
	The Anti-Sarbanes-Oxley Movement: Have Corporate-Governance Reforms Gone Too Far? (May/June 2007) Lead Paragraph:The critical question in Spring 2007 is, How long is long enough? The answer will depend on your point of view and vested interest when the subject is the regulation of securities and US capital markets. Is five years long enough for this cycle of reforms to run its course? Should we begin to weaken, repeal, or perhaps ignore the reforms of the first seven years of the twenty-first century?
	The Way Forward: The Global Auditing Big Six and Their Vision of Financial Reporting (March/April 2007) Lead Paragraph:First it was the Big Eight US (and increasingly global) accounting and auditing giants. Then there were the mergers that produced the Big Five followed by the spectacular collpase of the Arthur Andersen partnership. Suddenly it was down to the Big Four: KPMG International, PriceWaterhouseCoopers, Ernst & Young, and Deloitte Touche Tohmatsu. But if we add in BDO International and Grant Thornton for a new agglomeration of interests, we have a global "Big Six."
	Globalization Creates a New Era: Economies, Regulations, Technologies, Cultures, and Financial Markets Come Together (January/February 2007) Lead Paragraph:In his popular books on the theme of global trade - The World is Flat: A Brief History of the Twenty-first Century and, before that, The Lexus and the Olive Tree-New York Time Foreign Affairs Columnist Thomas Friedman brilliantly describes and elegantly frames the boundaries and frontiers of the new era that corporations and capital market players entered in 1989.
	Time Travelers: Boards Backdating Stock Options (November/December 2006) Lead Paragraph:Time Travel - we're all fascinated with the fantasy of being able to travel back and forth in time. Imagine whisking back in time to correct mistakes or fast-forwarding to watch the events of your life in 2026. In the 1985 movie Back to the Future, slacker teen Marty McFly is transported back to 1955 in a dilapidated DeLorean time machine created by mad scientist Doc Brown. Of course, this is all fiction. Or is it?
	Dramatic Events May Follow Expanded Proxy Disclosure Ordered by The SEC for CEO's "Total" Compensation Packages (September/October 2006) Lead Paragraph:Executive compensation has become the major lighting-rod issue in the changing relationships among institutional shareholders, corporate boards, and senior executives. CEO pay emerged as a more public and social issue in the mid-1980s to the early 1990s. It faded a bit in the heady days of the 1995-2000 bull market but then came roaring back into the headlines in the aftermath of dramatic corporate scandals, congressional inquiries, Securities and Exchange Commission (SEC) penalties, an epidemic of financial restatements, and continued inquiry by observers and journalists.
	Tackling Short-Termism: Mighty Tasks Ahead For Investors, Corporations, and Financial Analysts (July/August 2006) Lead Paragraph:As the hoary expression goes, "Everyone talks about the weather, but no one does anything about it." As if we mere mortals could affect gigantic weather patterns! Similar things are often said about the prevelant short-term views of investors, corporate executives, and financial analysts. While we all can agree that a focus on the next quarter's performance vs. the long-term sustainability of the enterprise is not good for any of the market players, who is going to do anything about it?
	America's Federal Reserve Banks: Much More Influence on Your Professional and Personal Life Than You Might Imagine (May/June 2006) Lead Paragraph:Pop Quiz: What is the Federal Reserve System? Oh yes, it is the organization that sets key bank interest rates, "controls" inflation, and has something to do with regulation of the United States banking industry... right? In March 2006, at one of his public press conferences, President George W. Bush suffered a senior moment (that all of us have experience one time or another) when he failed to recall the name of "the Fed" in answering a question from the audience, saying only that it wasn't his Administration but an "independent organization" that sets interest rates that in turn decide outcomes on home mortgage rates. (He couldn't recall the name of the Federal Reserve Bank for a brief moment.)
	Shareholder Involvement In Corporate Affairs (March/April 2006) Lead Paragraph:Shareholder involvement in the affairs of the corporations held in their portfolios - whether as institutional, fiduciary, or individual investor - has clearly and definably been accelerating since the recent spare of corporate scandals began to seriously erode the trust existing among shareowner, senior management, and corporate boards. Shareholder advocacy for change has long been with us; the recent dramatic increase in investor activities reflects a serious erosion of trust and more widespread support for shareholder activism.
	A Momentous First Decade of the 21st Century - Financial Executives Look Ahead at the Midpoint (January/February 2006) Lead Paragraph:For those who keep track of such things, we are just past the midway point in the eventful first decade of the 21st century. And quite a tumultous decade this "1/21" has been for corporate financial managers! We can begin a look back to the end years of the 20th century with a recalling of "C" suite angst as the dreaded Y2K deadline neared.
	Will Defined Benefit Corporate Plans "Sunset"? (November/December 2005) Lead Paragraph:The natural process of the aging of the American population, as millions of men and women trek inexorably toward their senior years -- an toward some type of retirement or curtailment of work schedule -- is raising serious questions about the safety, stability, and future of long-term reitrement "safety-net" systems. In the spotlight: defined benefit corporate pension plans, which have long been the staple of major U.S. corporations' employee benefits, especially for manufacturing companies. And Social Security for almost all US retirees.
	Are Corporate Accounting Systems Out-of-Date? (September/October 2005) Lead Paragraph:We can all agree that today's business environment is complex, especially thanks to technological advances, and that traditional ways of doing business are, in fact, becoming quite short-term in many instances. Today's hard goods manufacturer may well be tommorow's leading services provider in one sector or another. (The disappearance of the ATT Bell system's long-term manufacturing dominance is one example in telecommunications.) As industry changes, intriguing quiestions arise:
	What The NYSE-Archipelago Merger May Mean To Corporate Finance Managers (July/August 2005) Lead Paragraph:The surprise announcement in April 2005 that the venerable New York Stock Exchange (NYSE) would be combining resources with the upstart electronic exchange, Archipelago, signaled how dramatically the financial markets have been changing. In the discussion about the future of the NYSE that ensued, the importance of the stock exchange mechanism to the well-being of the capitalist system was the focus of mych media coverage.
	Independent Finincial Research: Changing The Way Investors View Research? (May/June 2005) Lead Paragraph:What if you gave a party and no one showed up? This is not a trick question; the "party" could well take the form of the global settlement reached by ten blue chip names - the major Wall Street investment firms - and New York Attorney General Eliot Spitzer, requiring that "independent" financial research be made available to retail customers for five years. What if few or no investors follow the guidance of the outside research, request such research, or even care that it is available?
	Popular Movements: A Challenge for Institutions and Managers (March/April 2005) Lead Paragraph:Remember the "environmental movement?" And, before that, the "conservation movement" of the early twentieth century? These popular societal movements are still with us, of course, but momentum is rapidly building in support of the emerging global "sustainability movement," with more intense focus on public corporations. And a corolary movement is gaining strength in the U.S., especially at the community level, focused on "environmental justice," especially where corporations have operations or influence investment in poor or minority communities.
	2005: The Era of Corporate Reformation Continues (January/February 2005) Lead Paragraph:As we turned the pages of the calendar, for the most public companies December 31 marked the close of official business; year-end financial results will soon be disclosed. The corporation's most important report card will then be presented to investors and potential owners (with thousands of companies reporting in a narrow time frame). Employees will also be able to clearly understand the state of the business - especially if they read the CEO's Management Discussion and Analysis (MD&A) and other key materials in the Annual Report and 10-K filings. On the other hand, the meandering course of a trend is more difficult to follow, particularly in an era characterized by dramatic events that do not begin or end in a neatly calendarized fashion.
	Pension Fund "Socialism" and the American Economy (November/December 2004 - Volume 8 - Number 8) Lead Paragraph:In recent years, "corporate governance" has become our shorthand for a variety of developments: investor focus on board composition and performance; report cards on executive performance (and behaviors); an umbrella term for demands for improved corporate "citizenship," especially as presented by social and economic justice activists; a description of the package of federal statutes and the reams of new regulations flowing from 2002 congressional decisions and related regulatory implementation (for example, the Sarbanes-Oxlet Act and SEC rules); the high-profile prosecutions of analysts, investment bankers, and mutual fund advisors by state attorneys general; and dramatically increased institutional investor activism, especially on the part of the nation's employee pension funds.
	The Sarbanes-Oxley "Revolution": Two Years and Counting (September/October 2004 - Volume 8 - Number 7) Lead Paragraph:It is more than two years now since the U.S. Congress voted to approve - and then rushed to the White House - the final version of the Sarbanes-Oxley package of legislation (SOX). President George W. Bush quickly put his signature to the bill, making it "instant" federal law. (Some provisions took effect upon signing.) Compared to other recent legislative initiatives, SOX was a simply stated document, unlike tax reform measures or the complex Medicaid "reform" legislative packages also passed by committees or full chambers of Congress.
	Forces Shaping the Financial Professional's World (July/August 2004 - Volume 8 - Number 6) Lead Paragraph:Corporate and capital markets finance professionals correctly sense that their professional lives are often buffeted and their practices shaped by larger, outside forces. Financial executives quickly feel the effects of social trends and public policy-making emanating from the intersection of politics, government, media coverage, and institutional investor activism. These forces are the most impactful outside "issue shapers and movers," and their influence on financial reporting and accounting practices today is considerable.
	2004 Proxy Season - A Test of New Rules and Attitudes (March/April 2004 - Volume 8 - Number 5) Lead Paragraph:Attention, board chairs, independent directors, chief executive officers, chief financial officers, and other senior corporate managers: with the turning of the calendar pages in January, you have now "crossed over" into a new and potentially far more volatile and uncertain operation issues arena for publicly owned corporations. The 2004 proxy voting season and the usual (mandatory) annual shareholder meetings are likely to be much more contentious for some companies and will provide a peek at the uncertain future for many other issuers.
	The Changed Environment - Challenges and Opportunities in 2004 (January/February 2004 - Volume 8 - Number 4) Lead Paragraph:The snowball is rolling down the hill, gathering speed now, growing larger in size, finally noticeable from a distance, a thing of major proportions and momentum, and seen in its entirety as a potential threat to those in its path. The snowball may be an apt metaphor for the aggregated chain of events that in 2004 will create challenges for corporate financial executives, chief executive officers, and members of boards of directors. Experts are projecting important and far-reaching changes in corporate financial reporting, accounting, disclosure, and financial engineering that will also have direct effects in the capital markets. The combined effect throughout the year might be compared in one's imagination to that metaphoric snowball barreling down the steep mountianside toward the villagers below. But at least the alarms have been clearly sounding for finance executives!
	The Current Era of Change (November/December 2003 - Volume 8 - Number 3) Lead Paragraph:Demands on corporate executives, members of boards , regulators, and financial markets for reform and greater accountabi lity continue to grow in the wake of legislative, regulatory, and in vestor actions. Significant changes are occuring in audit practice, corporate disclosure, financial reporting, financial analysis and re search, and individual and institutional accountabilities. This col umn examines the ongoing revolution in corporate governance as the s econd anniversary of the spectacular Enron collapse approaches. It was reported in 1781 that when the siege of Yorktown was lifted and the British troops surrendered to the American Revolutionary forces, they were marched out to their awaiting ships with regimental colors cased, while the tune the pipers and drummers played was an old British march with the appropriate title, "The World Turned Upside Down." For the expanding British Empire, this was, at the moment, a true statement!
	Executive Compensation for Senior Managers (September/October 2003 - Volume 8 - Number 2) Lead Paragraph:In ancient Greece, the philosopher Aristotle is said to have urged that no citizen of the first western democracy be paid more then seven times the wages of the lowest paid citizen. Twenty three centuries later, the founders of Ben & Jerry's, the ice cream manufacturing firm "with a social conscience," took this suggestion seriously and established the 7-to-1 ratio within their young firm. Senior executives' pay levels were not to exceed seven times that of their lowest wage level employees. Social responsibility advocates and some journalists cheered: few companies actually followed the example. (In 2000, the founders, Ben Cohen and Jerry Greenfield, sold their company to Unilever for $326 million and Mr. Cohen received $39 million for his interests.)
	The Future of Securities Analysis (July/August 2003 - Volume 8 - Number 1) Lead Paragraph:The global settlement reached with major Wall Street investment banking and brokerages by the Securities and Exchange Commission (SEC) and the New York Attorney General in April 2003 had the objectives of settling the issue of separating the research function from investment banking and trading, and reassuring investors they could rely on the "independent" research to be offered in the future by the ten firms involved in the settlement. Some observers noted that the settlement closed the boom era of the 1990s and cleared the way for a new era in research. For the first time, the details of the settlement touched off a lively debate over the future of "paid" and "free" financial research and the expected effects of the agreed-to changes on the corporate community, as well as on professional analysts.
	Proxy Season 2003 - A Window Into the Future (May June 2003 - Volume 7 - Number 6) Lead Paragraph:Most U.S. public companies schedule shareholder proxy voting and annual meetings in the first half of the year (following the close of business on a calendar basis, December 31). In recent years, there has been a steady increase in the numbers of resolutions introduced by individual and institutional shareholders, comprising two primary types: demands for changes in the way the corporation is structured or governed (corporate governance), and pressures applied through the proxy to change corporate behavior (e.g., to have the target company exhibit social responsibility).
	Sarbanes-Oxley Law Creating a Challenging Operating Environment for Corporate Finance Professionals (March/April 2003 - Volume 7 - Number 5) Lead Paragraph:The somber mood of federal policymakers was summed up by Senator Paul Sarbanes of Maryland, who told his colleagues: "For nearly seventy years, our framework of [U.S.] securities laws proved remarkably effective at protecting investors. Recent events [in 2002] show how urgently this framework needs reform. We must ensure that investors can once again trust corporate executives and their financial reports, and have confidence in the independence of accountants and analysts. We must assure that the SEC has adequate funds to carry out its mandate." Responding to the bold challenge of the Chair of the Senate Banking Committee, the U.S. Senate and House of Representatives eventually passed the wide-ranging Public Company Reform and Investor Protection Act of 2002, and President Bush quickly put his signature on the package of new laws on July 31, 2002.
	Corporate Governance in 2003: Forces Converge to Further Reforms (January/February 2003 - Volume 7 - Number 4) Lead Paragraph:The year 2002 will be viewed in retrospect as a period of intense examination of corporate behavior and financial performance, and the particular time when public sentiment shifted strongly in favor of significant reforms to address the governance issues of publicly owned companies. Two clear examples of this new public mood were the passage of the Sarbanes-Oxley Act by Congress, and the adoption of stringent governance rules for listed companies by the New York Stock Exchange. Just one year ago, Enron, the former number seven company in the Fortune 500 rankings was in financial free fall; much has happened since, with public and private sectors, self-regulatory organizations (SROs), and non-governmental organizations (NGOs) announcing one initiative after another to address corporate governance reform.
	The Period of Reformation Has Begun for the Financial Markets (November/December 2002 - Volume 7 - Number 3) Lead Paragraph:Wall Street interests and the American corporate sector are carefully watching the mood of the American investor, The level of confidence and trust by investors in financial reporting, and in the equities market overall, is quite low. Factors leading to this depressing state-of-mind and negative public mood include the dramatic collapse of the technology stock boom in spring 2000; the steady decline of major stock indices since that time; the effects of the broad economic contraction that began in spring 2001 (ending 120 months of expansion); the terrorist attacks centered in New York City and Washington D.C. in September 2001; and the expanding flow of bad news about corporations in 2002, especially after the year-end Enron financial collapse.
	Government Intervention Versus Self-Regulation for the Financial Markets (September/October 2002 - Volume 7 - Number 2) Lead Paragraph:Wall Street interests and the American corporate sector are carefully watching the mood of the American investor, The level of confidence and trust by investors in financial reporting, and in the equities market overall, is quite low. Factors leading to this depressing state-of-mind and negative public mood include the dramatic collapse of the technology stock boom in spring 2000; the steady decline of major stock indices since that time; the effects of the broad economic contraction that began in spring 2001 (ending 120 months of expansion); the terrorist attacks centered in New York City and Washington D.C. in September 2001; and the expanding flow of bad news about corporations in 2002, especially after the year-end Enron financial collapse.
	Calls for Governance Reform Increase as Public Sector Focuses on Accountants and Corporations (July/August 2002 - Volume 7 - Number 1) Lead Paragraph:Domestic and multinational corporations and their accounting and auditing firms continued to be buffeted by macro forces in the wake of the two major series of events that affected the United States in 2002. The first set of events began with the terrorist attacks of September 11, followed by the anthrax mailings in the weeks that followed the crash of the four airliners. The issues surrounding homeland security quickly became very visible matters for debate by governmnent officials, journalists and commentators, think tank scholars, academics, and analysts, many recommending dramtic increases in domestic security that will intimately involve the private sector.
	Have We Entered the Enron-Gate Era of Corporate Governance and Accountability? (May/June 2002 - Volume 6 - Number 6) Lead Paragraph:Corporate finance officers could find themselves operation in a significantly changed environment in the months and years after the spectacular financial failure of Enron. The media coverage of the various Enron post-mortems and focused broad public attention on the issues of corporate governance and corporate accountability. Until now, corporate governance was primarily a business and finance term with limited use, usually referring to issues concerning the internal organization and management of a public corporation. It mattered most to shareowners. Coming into vogue over the past 15 years as the demand for greater rights for shareowners increased, corporate governance advocates tended to focus on the protection, expansion, and exertion of these stockholder rights.