Thursday, December 01, 2005
Companies need to alleviate the burden of daily compliance, writes a reader.
Don Durfee, the author of "The Top Spot" (October), is right that more CFOs are transitioning to CEO because of a renewed emphasis on shareholder value and corporate governance. But he's wrong in suggesting that Sarbanes-Oxley is not a significant factor — for CFOs, if not for the boards that tap them for the top position. After all, CFOs already share the risk with CEOs if their companies are not in compliance.
According to the 2005 Oversight Systems Financial Executive Report on Sarbanes-Oxley, 51 percent of nonaudit financial executives responded that they wanted to be CEO. Interestingly, we also asked internal audit directors if they wanted to be CFO, and only 31 percent of audit-related financial executives said they were interested in the top financial spot.
The implication is significant because it confirms the perception that Sarbox has a negative impact on the morale of the employees responsible for compliance. Companies need to find ways to alleviate the burden of daily compliance in order to reduce employee frustration and attrition and to keep good employees in the pipeline for senior positions, whether CFO or CEO.
Chief Executive Officer
Oversight Systems Inc.
posted by Brian Moran @ 8:56 AM