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Sunday, November 09, 2014

Rise of New Recruitment Luminaries in 2003

Acknowledging those who are exceptional is usually reserved for those who have been in the forefront and gathered their own share of publicity. Martin de'Campo took a different path in recognizing recruiting industry personalities by starting an annual series to give recognition to the luminaries, visionaries, and unsung leaders. His first article appeared in the ER Daily in December 2002. The series has disappeared and some who are new to the industry aren't aware of some who were profiled in Martin's series. So it would be helpful for us to look at the observations he shared with us and consider the traits he sees that make champions and thought leaders.

If you'd like to see the other articles in his series so you can refresh your recollection of these notables, post a comment to this article (republished with permission) or contact me with your thoughts.

The Rise of New Recruitment Luminaries in 2003

by H. Martin de'Campo

I highly recommend the new movie "Frida" as a must-see this holiday season. The movie gives wonderful insight into the mind and heart of the famed artist and wife of Diego Rivera, Frida Kahlo.

For the longest time, Frida Kahlo lived in the shadow of her louder, more opinionated husband. This was the case with many of the most avant-garde artists in the last century. Too often, great artists were quiet, sublime, and often overlooked until much later in their careers. Many were simply unsung visionaries who were simply focused on their creative work, too busy actually practicing their art to worry about telling others what they were creating. As such, many went unnoticed and unappreciated.

Well, I believe that recruitment is also an art form, except that our "canvas" is the organizations we serve. Like many of the unsung artists of yore, there are many notable and even avant-garde recruiters and human capitalists who, although they don't say or write very much, are truly worthy of our attention. It is these individuals whom I want to focus on in this article.

Some of these people you may recognize, others you may not. But in either case, these individuals represent the "under sung" luminaries who are achieving incredible feats in our industry. Every one of these people are recruiters and true practitioners of the art of human capitalism, day in and day out, and often lack the time to teach or write about what they're doing. Each, I believe, will be making a continued and notable impact in 2003, and as such merit your attention.

I thank each of them for their time, it was a great honor to speak to them during my research. I know you'll agree they're people we all need to watch in 2003!


Being the global vice president of human resources at the largest, most highly regarded game developer in the world is not easy. One would think that frustration and stress would be common to anyone wearing the badge of VP at Electronic Arts. To better understand the magnitude of his job, consider the fact that last year Electronic Arts received over 40,000 applications from interested candidates!

Yet when I spoke to Rusty, I sensed no stress at all. On the contrary, I encountered a man refreshingly involved, excited, and even passionate about his role at Electronic Arts. He embodied the emotions of an "artist," excited with his past and present works.

To get to know Rusty is to also learn about his convictions of being responsive to all that gravitates in and around HR, both internal and external clients. He told me, "It's important to practice what you preach. People can tell if you're the 'real deal' or not. I was interviewed recently in an article that came out in Fast Company, and I received thousands of emails. I made a commitment to myself that I would respond to each and every one of those reader's inquiries, and that's just what I did!" As you might expect, only a man whose "walk" matches his passionate "talk" can succeed in such a position.

But despite Rusty's high profile successes, he's still not heard from much, obviously keeping himself busy. In fact, under Rusty's management, EA's recruitment strategies have been effectively aligned to reflect many of the same innovative qualities that encompass their game products. "We figure that since our games are dynamic and creative, our recruitment initiatives should also possess similar qualities," he says.

EA has in fact managed to tap into the hundreds of millions of young passionate consumers as possible future passionate EA employees! Rusty explains, "In every game we sell, you'll find an invitation to that consumer to join EA's Academy of future talent." And "join" is exactly what many do! His recruitment success at EA has provided them with an internal talent database (known as EA Recruiter) of over 200,000 candidates.

I was quite impressed to see that EA is a virtual laboratory of staffing innovations, and that Rusty has even more "artistic" recruitment plans for 2003. He expects to publish a book along with Hank Stringer next year called "The Talent Manifesto for the New Age." All this makes EA a definite "must watch" next year!


Anyone who speaks with Howard Adamsky will immediately notice his natural and creative ability of analysis and communication. Howard is the author of Hiring & Retaining Top IT Professionals, published through McGraw Hill-Osborne and he will be publishing another work that is due out in 2003.

He and his wife and business partner Corinne Adamsky lead HR Innovators. Howard is constantly seeking new and innovative ways to attract and retain talent for both his clients and his own firm. Although Howard has just begun writing for the ERE, he possesses the experience and skill of an entire recruitment department! After having spoken with him, I walked away with a refreshing sense of our industry's future.

For 2003, Howard indicates that four very important issues will reveal themselves in the staffing world:
  1. The "candidate experience" in the area of technology development and recruitment process will begin to dominate the attention of technology developers and recruitment industry
  2. Corporate retention initiatives will be tied into the recruitment imperative.
  3. Tracking and improving the "cultural experience" of employees through internal employee surveys will become more critical than ever.
  4. Staffing agencies will need to change their business models so that they directly add value to their clients. Selling candidates for a sales commission will be widely seen as a "zero value" business model.
If Howard's next book is anything like his current book, I'm sure our entire industry will take notice AGAIN next year!


Mark is the founder of BrassRing, and he currently serves as chief scientist there now. Most people don't know that Mark is one of the original technology innovators in the area of talent management systems (TMS). Despite the fact that recruitment technologies have experienced a revolution of sorts in the last couple of years, Mark's ideas have continued to set the pace, challenging other "competitors" to raise the bar in job and resume database capabilities.

Anyone who speaks to Mark quickly becomes impressed with his balanced knowledge and capability. On the one hand, he's clearly the technology guru at BrassRing. Yet he speaks very much like a recruitment professional at heart. He clearly "gets" our business.

Mark's grasp of both technology and talent acquisition are what helped him to successfully develop BrassRing's E-Link tool, which replaces the vast majority of paperwork involved in staffing and enables end-users in the recruitment process to interact in every fashion imaginable without paper. The beauty of E-Link is that where once only paper enacted shifts in the process, E-Link now takes over. Another paradigm shift in BrassRing's technology is its ability to tie communications with everyone in the recruiting loop, without everyone needing to be subscribed to BrassRing. As long as the initial recruiter is subscribed into the BrassRing E-Link system, the other "players" in the recruitment process need NOT be subscribed with passwords into the system to read and assist in the recruitment process.

The implications of Mark's system are tremendous! E-Link has helped countless HR and staffing teams nationwide benefit from the best of both worlds: retaining control of the process, yet enabling the secure inclusion of others in the recruitment process.

For 2003, Mark believes that "the future of TMS, sourcing, and similar technologies will be the integration of professional recruitment consulting services." Knowing that Mark has positively impacted an entire industry with both his creations and perspectives, he and BrassRing are a team to watch in 2003.


Charles Handler is the founder and principal of His firm specializes in various screening and assessment tools and resources. He's also the author of various articles and works in the area of psychological candidate screenings. He is currently working on a new resource book where he'll profile online screening vendors, that'll be published in 2003.

Charles clearly qualifies for this list, because he's one of those individuals whose walk is louder than his talk. A rare attribute nowadays! Anyone who speaks with Charles will quickly know that he's an expert screening and assessment practitioner, and not simply a professional "speaker." His opinions and creative knowledge are all based on his daily work with his clients. So when Charles says, "in 2003, screening and assessment strategies will be a rising critical focus," you'd better listen and take note!

According to Charles, the continued glut of talent in a majority of the markets will mean the shift of sourcing as a focus to screening and assessment services as a major concern in the recruiting world. Charles' precepts, services and "loud-professional-walk" in the field of screening and assessments positions him as a man to watch in 2003.


Yvonne is perhaps one of the most unique professionals in the field of recruitment I've ever had the pleasure to speak with. Her perspectives are unique and advanced. Her ability to relate to and validate the people she speaks with should be a REQUIRED skill expected of all HR and recruitment professionals.

It's this skill that places Yvonne on the constant forefront of staffing. Her daily consulting work with her clients take priority over any article or speaking engagement she may be working on, and this is likely what keeps her in the avant-garde of our field. Since she's constantly in the "recruitment trenches," she's a fine "barometer" of what's going on in the staffing world at any given time.

Some things are better said by the actual author, so in her own words, here are some of Yvonne's perspectives for our industry in 2003:
  1. "Leadership, management and entrepreneurial skills will be even more important next year. Corporations will place great value on employees capable of thinking outside the box, who can push the innovative envelope on behalf of the company."

  2. "The glut of talent in many markets has compelled many people to go back to school to improve their skills and knowledge. As such, we're going to have a renaissance in education, professionalism, and accuracy in 2003."

  3. "True diversity strategy will no longer remain only a 'desirable' initiative, but a necessity! Strategies will be implemented to derive the benefits from the many perspectives available from multiple diverse workforce facets of the market's talent pool."
Yvonne's perspectives and accomplishments make her one of the people to watch in 2003.


Dave is an interactive solutions consultant for TMP. He focuses on providing TMP's clients with strategic "big picture" solutions for their recruitment initiatives. As a consultant, Dave travels in the service of clients, not only making him the consummate practitioner of our profession, but also giving him the 10,000-foot view of what's going on in the recruitment world.

You may have already seen some of his articles here on the ERE, but in my opinion, we just don't hear enough from Dave. Speaking to him, one quickly realizes that he loves technology and how it integrates into the recruiter's daily functions. He reminds me that the evolutionary state of technology in our industry is very much in its infancy. "Technologies and what they can actually do for the talent acquisitions and retention function still have a long way to go," he says.

He believes not all the industries in our economy have embraced technology's contributions in staffing, and that not all candidates, such as hourly candidates, are exposed to effective interactive employment technologies. "The medical and healthcare industries are about five years behind in their adoption of recruitment technologies," he tells me. "Too many of our clients realize too late that spending millions of dollars on newspaper advertising is simply wasteful!"

"It's important that, for 2003, recruitment technologies continue to evolve, increasing their sensitivity to the candidate experience," he says. He makes the point that although many recruitment technologies have resolved recruitment communication and administration problems, they're still not geared towards making the candidate's experience positive or less burdensome. For 2003, Dave sees technologies becoming more candidate supportive, faster, and pervasive in all industries, especially in healthcare and in the recruitment of hourly candidates.

Based on his knowledge and "big picture" view, I hope the TMS and ATS industry is listening. His perspectives and quality of consultation to his clients, easily qualifies Dave as one player we should all watch next year.


Another, person to watch this coming year is Scott Weston, principal of Falcon Strategic Group. His consulting, speaking, and forward-thinking ideas are fueled by his obvious passion about the strategic recruiting industry.

"This is an exciting time in staffing," Weston says. "The talent economy continues to unfold, and I believe internal staffing professionals have a prime opportunity to take their place at the executive table by better demonstrating their strategic value. There can be no more throwing a candidate over the wall to HR and the hiring manager after an offer is accepted. Recruiters need to start tracking and tying themselves to more qualitative measures, including a candidate's success and longevity in the organization."

"As a result," he adds, "recruiting vendors and third-party staffing firms are also going to need to follow suit and partner even closer to be in line with this expanded focus on value and retention."

Scott believes that in order to achieve this, recruiters will need to be aligned and held accountable with employee evaluations, exit interviews and even training. Although he's not written very much lately, you can expect to hear more about Scott, Falcon Strategic Consulting, and his visions for our industry's future.


Remember, anyone can be a member of the unnoticed recruiting avant-garde, and perhaps in one way or another, most recruiters are. So consider this a dedication to all of the unsung, practicing luminaries, you innovative leaders who are busy practicing the art of human capital to bother seeking recognition or rewards. This is a holiday dedication for those in the frontlines, working daily, managing, and driving the growth of our stagnant business community...those of you that go unnoticed, but deserve the greatest rewards nonetheless.

May your work, passions, and victories be revealed to all of us in 2003 and may the new year bring greater rewards for us all in the practice of our "craft"!

Until next year, let me know your thoughts, be safe, and as always, I'm here to serve.

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Sunday, September 28, 2014

Financial Counseling for Domestic Abuse Victims

The month of October is Domestic Violence Awareness Month. Most of us are familiar with the physical interpretation of the issue. Few are actively aware of the fact that the abuse can run the gamut of all aspects of a victim's life, including their access to funds and credit. During my tenure as a contributing author and Editorial Advisory Board member of SmartPros, the managing editor published information financial professionals can use regarding counseling and serving the needs of women who are survivors of domestic abuse as it relates to finances. That was in 2002. Many things have changed but some have not.

The article can no longer be found on the SmartPros site. It is reproduced here to serve as an introduction to the concepts.


Financial Counseling for Domestic Abuse Victims


Yvonne LaRose

December 2002 -- According to a 1993 pamphlet prepared by the National Woman Abuse Prevention Project, three to four million women per year are the targets of domestic abuse because they are beaten by their husband or partner in the home. Of this number, those who leave the home with their children have a 50 percent likelihood of having their standard of living drop below the poverty line or are likely to resort to welfare or homelessness because of the financial constraints they endured. However, these women -- and men -- do escape and do survive albeit with great initial difficulty.

Those who are able to get into a battered women's shelter for the usual 30- to 45-day stay will not receive financial or budget counseling, nor advice on credit repair. In the United States, there are only two long-term shelters (twelve to twenty-four months, also known as transitional housing facilities), where they will receive this type of counseling and guidance. Those two shelters are prototypes from which additional programs will be started.

Don’t be surprised when a client comes to you for financial or tax guidance and you discover your non-stereotypical client is a survivor. Domestic abuse is not an issue that affects the poor, uneducated person of color. Domestic abuse is a malevolent disease. It doesn’t recognize age, attractiveness, ethnicity, education, intelligence, wealth, or position.

The Problem

Physical abuse and battering is one element of domestic abuse. Other aspects of this crime that are just as or more insidious and harmful are emotional, sexual and financial abuse. The financial aspect is the element that keeps the target in her situation; the financial aspect is what will bring the her to you after she's escaped.

The Usual Pattern

Abuse grows from a personal, intimate relationship of presumed trust. The abuser gains access to all of your client’s personal information, physical assets and documents. Then access to them is doled out in stingy bits (if at all).


Sister Anne Kelley, executive director of a long-term battered women’s shelter, described some forms of debt that an abuser will create for their target. Large credit charges from misuse of or stolen credit cards, stolen vehicle pink slips, and enormous telephone bills. Not included in the list are things such as unauthorized (or coerced) savings withdrawals, checking account overdrafts, withdrawals from retirement or pension funds, sells or trades of stocks and bonds or certificate of deposit withdrawals.

Starting Over on Meager Funds

Sister Kelley’s program is one of two in the country (California and Illinois) that offers comprehensive classes on getting started again. The classes teach the survivors how to do a credit check and then start the clean-up process. The clean-up work involves working out credit and repayment plans, getting charges dropped, or shifting the burden of debt back to the responsible party. She notes that a huge influx of recent second-step program funds, some from Violence Against Women Act ("VAWA") and some from the State, have enabled these classes.

Since there are only two programs like this in all of the United States and millions of women (not including men nor elders who are subject to the same type of abuse), it soon becomes clear that financial professionals need to be aware of the problem of domestic financial abuse and the issues the survivor must handle in order to start her new life.

Safety Measures

So in addition to the credit review and repair work, some safety measures need to be implemented. The abuser has the target's full name, birth date and place, Social Security number, driver's license number and all financial account numbers. The abuser also has access to all documents of title. Changing one's Social Security number is so difficult, it could be called an exercise in futility.

The better route is erecting safeguards and passwords that are not based on the usual: mother's maiden name, last four digits of (or full) Social Security number, place of birth or birth date. Instead, the client should choose unique passwords or numbers for access to all of their records and bills and then keep those passwords confidential.

All assets that were previously held in a joint account should be separated so that the client is the only one who has access and theirs is the only name of ownership.

Even though you may have a document in front of you that names the abuser as an authorized person on an account, you need to ascertain from your client how that instrument of authority was created. Many times the abuser will forge documents in the survivor's name; use false pretenses, extortion or coercion to get power of attorney or authorization; or impersonate the client. Question your client carefully to ascertain whether any of these scenarios are the case. Counsel on how to rescind the instruments or notify the institutions of their invalidity.

Repairing and Rebuilding Credit

You’ll want to work with your client on ways to repair her credit or offer her guidance on where to get that counseling. She’ll also want to know how to rebuild a good credit record and will look to you for how to get that information. Have a reference list you can give her.

Rebuilding Finances

The survivor of domestic (financial) abuse needs to rebuild her funds. In many cases, the survivor escaped with less than $50 and the clothing on her back. She’ll want advice on how to budget, start saving, rebuilding a retirement fund, get affordable health insurance, and regain title to any securities she may have owned. She’ll want to know about the various types of safe securities on the market and which are more feasible choices.

Safe Havens

It isn't a pretty picture, no matter what type of abuse occurred. However, the process of rebuilding from domestic abuse requires special financial counseling for a special type of client. As programs and awareness grow, you'll be one of her havens for that guidance.

About the Author:

Yvonne LaRose is a California Accredited Consultant. She combines her years of experience in law, business, recruiting, and executive responsibilities to provide management and recruiting consultation in addition to career development coaching and public speaking. Her column, Career and Executive Recruiting Advice (known as "CERA"), and her Web site, provide news, advice, and tools for one’s professional development and recruiting interests. She is a contributing author to the ebook, The Last Job Search Guide You'll Ever Need. She can be reached via email at ylarose at consultant dot com for additional information concerning domestic and workplace violence or visit the "Domestic Violence" heading of the Articles Index.

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Saturday, September 06, 2014

Universal Basis

It's ironic that there are so many issues that people say they care about and want to do something to cause positive change. Many times the basis of the dynamic crosses into other realms and creates its own set of chaotic disruptions and fear. But when we start examining the elements, it all comes back to the same "bacteria" - abuse.

No matter what label we put on the abuse, whether it be sexual harassment, bullying, domestic violence, domestic abuse, slavery, discrimination, extortion, or fraud, it comes down to the same dynamics and motivating factors.


The motivating factors are essentially
  • need for power (control);
  • feelings of inadequacy,
  • envy,
  • jealously (neediness); or
  • just perverse focus on self gratification (narcissism).
Tools of the Trade

Some of the tools of trade are creating a false nest so that the target will believe they have a trusted friend or ally. It helps to have charisma in some way, whether good looks, talents or skills that the target is lacking, and a dulcet voice. Those attributes are woven into flattery geared toward inducing trust. And they will trade on the relationship between them and their target in order to further create a bond built on a sense of security. When something goes wrong, the target believes there's a valid reason for self doubt when things happen not ordinarily part of a trusting relationship. And there is the logic that is spread over every transaction (usually circuitous in nature) that gives a warped reason for why the abuser is entitled to their actions while the target has done something that is incomplete, inadequate, or not proper.

If the target resists the initial efforts at logic or self doubt, the abuser will resort to threats of punishment in some manner. This can run the gamut from removal of privileges, destruction or barring access to something that has meaning to the target (no matter how minimal or simple), bombastic behavior (such as shouting or slamming things) that induces fear of violence. If the resistance to these efforts continues, the abuser will move into the next phase, destruction of the target's associations and reputation.

The Timing

The abuser is patient. In fact, they will use their "courtship" period to build a bond of trust. Whatever amount of time it takes to build the illusion of trust and confidence is necessary to begin the next phase can be dedicated to that mission. Rushed courtship is failed courtship. The prey will escape. During that courtship, and even before they hone in on their target, they are evaluating the practices and personality characteristics of their target to develop just the right attraction and staying power.

Just Like Family

In a familial relationship, we are constantly told that family is where one derives the greatest amount of safety and security; trust of family members should be extremely high. Why we have dynamics of child abuse and incest are not explained; the illness is buried under other matters in order to distract from the harm that befalls the victim. And besides that, there's the old adage of not airing one's dirty laundry - the family secrets. So we turn a blind eye to the familial betrayals and disappointments. To the rest of the world, there is consummate loyalty - defend the family member to the death.

But after the front door is closed, all manner of horrors occur. They can be physical, mental, psychological, financial. Here are the first areas of attack for disrupting meaningful efforts to obtain employment and self sufficiency. Attempts to earn an education and good grades are sent into destructive areas. Homework assignments disappear only to resurface days after the due date. The grade for the assignment is either lowered or given an incomplete. After a time, the classwork is so far behind that it no longer makes sense to continue the course.

The target is forced to do things in a certain order, to maintain organization to extreme heights of integrity - to the point of obsession. 

Having friends come to visit is next to taboo. In fact, the abuser will not allow friends to visit. If the target seems to gain too much popularity, it is possible they will get out of control, start thinking for their own self, and defy the abuser. That means outside relationships must be discouraged at any cost. But the best way to succeed in discouraging relationships is to defame the target in some way - dissuade others from associating with the target because they have done something that is too offensive. The taint too horrible. This is also known as the period of isolation.

Then There's at Work

There are work relationships where we are told that the manager has their team's best interests at heart. As a leader, that is the manager's responsibility.

Managers aren't above being abusers. They've simply transferred their abusive style from the home to the workplace. Somehow, they charmed the recruiter and the interviewers into not seeing the first glimpses of an abusive personality. And they have succeeded in sidestepping the dangerous state of being reported as an abuser. With no criminal or abusive record on the background screening documentation, they're in a prime position to get hired. Once in a managerial position, they nearly walk on water as far as who's word has more weight in evaluating a situation where a worker has complained.

It's Everywhere

The same principles apply to volunteer organizations, government, churches, schools. The sickness, like the flu, simply gets transferred from one place to another without regard to location nor anything else. Abuse by any name is still abuse and it's universal as to its application and manifestation.

Additional Reading:

Thursday, July 10, 2014

A Guide to Sarbanes-Oxley, Part Two


Niquette M. Kelcher

October 2002 -- In Part One of this series, we discussed how the Sarbanes-Oxley Act came to be, outlined its major provisions, shared accounting and finance professionals' reactions to SOA, and explained what it means to the accounting profession.

If you missed Part One, click here. Here's what's covered in Part Two:
  • How managers can implement SOA into the company culture
  • How to keep staff members educated and informed
How Managers Can Implement SOA Into Company Culture

Creating new laws and expecting companies to follow them is one thing, but efficient implementation of them is another. Clair Raubenstine, former president of the Institute of Management Accountants, emphasizes the crucial "tone at the top."

According to Raubenstine, "Companies need to communicate that they are resisting the pressures of the financial community and setting realistic goals. Don't set goals too high for the sales staff, for instance. Additionally, managers should encourage open lines of communication between management and staff. Management needs to 'walk the talk.'"

Ethics programs, already a staple in many companies but expected to pop up in more, also should be implemented. Raubenstine suggests companies establish ethics hotlines and assign ethics coordinators so employees can report suspected misconduct without penalization. 

"Management has to continually educate personnel what the company rules are and educate people on how their role fits in with the total organization and the overall mission of the department. Employees need to feel like they are a part of the business," explains Raubenstine.

In turn, he continues, finance and accounting professionals need to recognize that there are more penalties that could be imposed on individuals for not properly reporting financial matters throughout the ranks. "Companies will expect more from their employees so management is properly certifying the financial information," says Raubenstine.

Yvonne LaRose, a Business Management and Personnel Consultant for Executive Recruiting Entrances, agrees that managers need to set an example. "Managers lead by how they conduct themselves; their staff takes their cue on what is important and how to do things based on how managers handle situations. Thus, managers should incorporate into their routine a pattern of following good practices," she explains.

Additionally, adds LaRose, "when reports are presented to a partner or manager, there should not be a rubber stamp approval. Managers need to take the time to actually review the document(s) and ask questions about numbers -- and even sources of information -- to ensure that they know what is there. If there are red flag issues, they should be addressed. Staff should be put on notice that those types of issues are important and attended to at the source so that matters are rectified and the problem abated."

In a SmartPros FMN segment, Dr. Jonathan Schiff, professor of accounting, Fairleigh Dickinson University and president of Schiff Consulting Group, gives similar advice. Schiff says financial managers "should have good documentation of plans, as well as programs in place, that try to do more than merely react to what Congress may come up with, or what the SEC may come up with. They need to be more proactive in designing systems of control that are competitive within one's industry and which raise the level of acumen across management."

Free guidance on corporate ethics is available from a variety of associations. Through the IMA, financial professionals can now get free, confidential guidance on ethical issues via the IMA Ethics Hotline. 

"When financial professionals call the toll-free hotline, their inquiries will be forwarded to an experienced ethics counselor, who provides confidential guidance," explains IMA president Margaret Butler. "This hotline is particularly well-suited for small businesses and solo practitioners who need guidance on ethical issues."

The IMA also offers to corporations the use of its Standards of Ethical Conduct for compliance with Section 404 of the Sarbanes-Oxley Act of 2002.

Similarly, Financial Executives International encourages companies to adopt its Code of Ethics model (Word doc).

How to Keep Staff Member Educated and Informed

Despite the disruption SOA may cause, the show must go on. Says Wyatt: "As with anything new, accounting firms should encourage reading and study." Companies must continue to perform -- and given the current economy they must perform within a limited budget.

So how can managers ensure their staff is up to speed on the new requirements? SmartPros culled expert opinions and various studies on some cost-effective methods for educating accounting staff members on SOA and related topics.


Webcasts and online continuing professional education are among the most efficient and cost-effective means of staying on top of the profession because companies are spared many expenses by educating staff in the office or at home at their own computers.

Nucleus Research reports that thousands of ongoing return on investment (ROI) studies for Global 2000 corporations indicate that companies adopting e-learning initiatives recognize "first-tier benefits including reduced costs for travel, human resources overhead, regulatory compliance, and customer-support costs." Additionally, second-tier benefits include "improved employee performance that directly impacts profitability." Nucleus found that most organizations could gain significant returns from even modest investments in e-learning technology."

Adds LaRose: "Seminars are an extremely valuable tool in developing a greater appreciation of the terms and nuances of the Act. From these trainings, professionals and leaders will be able to get immediate, first-hand answers to the initial questions -- answers that will build understanding of what is involved and some approaches to responsible attention to details."

Books (hot off the presses)

An entire library of accounting and finance books related to the upheaval of the industry have been published, including material on detection and prevention of fraud, audit committee and ethics handbooks, investor guides, cost management resources and management primers.

Book recommendations from SmartPros:
  • The Financial Numbers Game by Charles W. Mulford
  • Take on the Street by Arthur Levitt
  • Ethics for CPAs: Meeting Expectations in Challenging Times by D. R. Carmichael, Dan M. Guy, Linda A. Lach
  • The Audit Committee Handbook by Louis Braiotta, Jr.
  • Financial Statement Fraud: Prevention and Detection by Zabihollah Rezaee
  • Paying for Performance: A Guide to Compensation Management by Peter D. Chingos
  • Valuation of Companies in Emerging Markets by Luis E. Pereiro
  • Essentials of Corporate Performance Measurement by George T. Friedlob, Lydia L. F. Schleifer and Franklin J. Plewa Jr.
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Sunday, June 29, 2014

Reviving Ethics in Recruiting

In 2004, I developed a discussion group called Ethics in Recruiting. The goal was to have a place where those in the recruiting industry could discuss best practices, consider the ethics involved in those practices, and develop a consensus about ethical practices that could be used on a global basis. That last prong would also require learning about cultural practices from various countries in order to gain an appreciation of whether or not a global standard is even possible.

Nevertheless, it was a venue where those in the industry could talk about practices and look for guidance - or just vent. There were members who came from other industries. Their presence provided us with various barometers and bases for consideration of rules.

It was a lively and popular group that drew a lot of attention. It was a bold move. By 2006, it became a recruiting conference session on its own merit. It was in essence the topic du jour and there was fierce competition for ownership of the group. It was obvious the group needed to move to its own home; the move didn't happen in time. By 2008, the original venue dropped the group.

The idea and need still lives. To satisfy the desire for that type of group, Ethics in Recruiting discussions is being revived as a subgroup of Entrances, the 360 networking group on LinkedIn. It will be available for members by July 1, 2014. Join us.

Look for the LinkedIn logo

Tuesday, June 17, 2014

A Guide to Sarbanes-Oxley, Part One

It was 2002. As a measure to ameliorate the financial industry atrocities that were revealed, the Sarbanes-Oxley Act was adopted. Questions arose regarding its effectiveness, its reach, implementation and adoption. SmartPros dedicated a two-part article to examine the Act and collect opinions and reactions from professionals associated with the industry. Even though 12 years have passed since its implementation and the article has been removed from the SmartPros site, it would serve financial industry newcomers to have a reference point about the "why" of the Act and the early reactions to it.

A Guide to Sarbanes-Oxley, Part One

Niquette M. Kelcher

October 2002 -- The groundbreaking Sarbanes-Oxley Act signed into law by President Bush in July 2002 will forever be remembered as the legislation spurred by corporate corruption, crooked CEOs and creative accounting.

In reality, the accounting industry has been heading toward a major reform for many years - it just finally came to a head. Now that it's here, financial executives find themselves at a crossroads, facing the daunting task of implementing major changes in day-to-day operations, while at the same time quickly educating their staff on the sweeping changes brought on by proactive - but also reactive - legislation.

This article provides a concise overview of the many facets of the Sarbanes-Oxley Act (SOA) including:
  • How accounting reform caught up with the industry
  • Major provisions of the Act
  • Reaction from the trenches
  • What SOA means to the accounting profession
  • How managers can implement SOA into the company culture
  • How to keep staff members educated and informed
How Accounting Reform Initiatives Caught Up With the Industry

It's viable to stretch back to the beginning of accounting as an "industry" to address how this recent reform effort came to be, but all we really need to do to understand this phenomenon is step back into the 1990's - a decade that proved to be incredibly tumultuous for the accounting industry overall, a decade that began with an economic slump and ended at the tail-end of a technology boom - to understand why we are here today.

In former Securities and Exchange Commission chairman Arthur Levitt's new book, Take on the Street, published this month, he writes about the politically-charged nature of Wall Street during his tenure as SEC chief in the 90's. Levitt, the 25th chairman and also longest-serving, held the reigns at the watchdog agency for seven years under the Clinton administration. A strong supporter of auditor independence, Levitt, who calls himself "pro-investor," constantly battled with accounting firms and the AICPA over the controversial issue, as firms began to package their auditing services with technology consulting.

But it was an incident involving the Financial Accounting Standards Board that Levitt cites as the biggest mistake he made as SEC chief. In the early part of the 90's, Levitt says he persuaded the FASB to soften its stock-based compensation rules because of political and corporate pressures to do so. (Of course, this same topic is in debate today.)

Levitt states that he learned a valuable lesson from this mistake: "Accounting firms were passive when it came to standing up for investor interests," he writes. "[Auditors] failed to rally to the cause of investors and instead supported the demands of corporate clients. They had become advocates. I would forever look upon the accounting profession differently after this episode."

Hence, Levitt began to tout major accounting reform efforts. At the turn of the millennium he left current SEC chief Harvey Pitt with a lot of reformation left to be done, and until Enron happened, the industry was pretty sure Pitt's "kinder" and "gentler" SEC would stem the talk of accounting reform.

However, Enron helped investors see what Levitt realized many years prior - that the self-regulated industry failed to protect them. Consequently, a weak economy and discontent voters pushed Congress to action. Suddenly Levitt's ideas weren't so radical after all; In fact, many of the reforms proposed by him while he served as SEC chairman have been adopted by the Sarbanes-Oxley Act, legislation that has yet to show its true colors.

Major Provisions of the Sarbanes-Oxley Act

Specifically, the new law, as explained in a SmartPros Financial Management Network segment:
  1. Establishes an independent auditing oversight board under the SEC;
  2. Beefs up penalties for corporate wrongdoers;
  3. Requires faster and more extensive financial disclosure; and
  4. Creates avenues of recourse for aggrieved shareholders.
One of the most fundamental changes for the accounting profession is the creation of the independent Public Company Accounting Oversight Board, a non-profit corporation funded by public companies and subject to SEC supervision. At this time the Board has yet to be formed, but it is expected to wield significant power. [See $435,000 Oversight Positions Prove Tough to Fill]

Here are links to in-depth texts on the Act:
Other articles worth reading:
Reaction from the Trenches

So far, the reaction from accounting and finance professionals in the field has been mixed. Many say it's about time such legislation passed, while others matter-of-factly state that all the legal ramifications in the world won't stop corporate crooks from lying, cheating and stealing.

In a recent survey conducted by CFO magazine, most financial officers voiced opposition to specific reforms. Some 52 percent, in fact, did not believe audit firms should be banned from providing consulting services to clients; 65 percent did not think auditors should be barred from going to work for clients for a specified period; and 52 percent did not think it wise to rotate auditors on a regular basis.

"For CFOs," says Julia Homer, editor-in-chief of CFO magazine, "all of these proposals are just going to make their jobs more time-consuming and expensive."

Gary Wyatt, CPA, a benefits and compensation specialist with Texas-based Travis Wolff Advisors & Accountants, says those accounting firms with a large number of public clients will be dramatically impacted.

"It will change the way they do business," Wyatt explains. "No longer can the financial statement audit be used as a 'loss leader' in hopes of selling more lucrative tax and consulting services. The largest accounting firms will likely lose many tax-consulting clients to each other. Also, high-quality regional and specialty 'boutique' accounting firms may pick up significant new tax and consulting engagements."

Wyatt also believes private companies will feel the effects of SOA: "Even though the Act is generally applicable only to public companies, the principles may eventually spread into 'best practices' affecting auditors of private companies."

William Maslo, an experienced speaker on financial topics with his own CPA practice in Reading, Pennsylvania, agrees. He speaks for the "non-SEC practitioner" who "is fearful that the concepts of the Sarbanes-Oxley Act could be adopted by state legislatures to affect non-public companies. The larger firms manage to spin off divisions and operate in a way that, at the end of the day, all is well. But for smaller firms this could spell disaster," explains Maslo.

Rebecca Wallace, a Colorado-based attorney and CPA, says the "Act is most significant for accountants because it takes away accountants ability to regulate themselves . . .. While increased oversight of the accounting firms should help to keep the audits in check, too much SEC control over the process is not necessarily a good idea. The creation of layer upon layer of bureaucracy could lead to inevitable inefficiencies in the end sought by the Act."

Bruce W. Marcus, a consultant in marketing and strategic planning for professional firms and the editor of The Marcus Letter on Professional Services Marketing, says the ramifications of the sweeping SOA "may be more damaging than the conditions they mean to correct."

In a recent article, What Sarbanes-Oxley Will Mean to the Accounting Profession, Marcus highlights the inherent challenges accountants - and accounting firms in particular - now face with the implementation of SOA, including the separation of auditing and consulting services. "Many services are relevant to improving the audit," he argues. To meet the needs of its clients, firms will need to find a way to implement consulting services that improve the audit, such as technology services that improve the flow of financial data, without the "consulting services that flagrantly taint the attest function."

Additionally, Marcus recommends the accounting profession re-examine its partnership structure by "reworking the governance structures for better management, and to allow the outside world to see more clearly how each firm is serving the clients and protecting their shareholders."

Likewise, the profession and those who regulate it should remember it does not operate in isolation to the markets it serves. "The time has come for all professionals to recognize that they exist only in their ability to meet the needs of their clients and the public – and not themselves," says Marcus.

Go on to Part Two and learn:
  • How managers can implement SOA into the company culture
  • How to keep staff members educated and informed
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Tuesday, February 18, 2014

What's Your Emphasis

LinkedIn has a poll that asks which of four qualities is most important in running your business:

  • Learning from mistakes
  • Embracing change
  • Taking calculated risks
  • Focusing on the future

One of the things an Organizational Development person does is encourage change where it's necessary. And change is part of the evolution of things. Another term for change is "progress."
Being in business for yourself means you take calculated risks much of the time. Even making the decision to start a business shows the tendency to embrace risk because there are no guarantees of success except for what you put into the effort. Even then, the guarantees of success are not there because many other factors come into play and impact the plans that were initially formulated.

The failure to learn from one's past and from the mistakes that put you where you are today means, like Sisyphus, you are in a constant state of striving to get "there" instead of moving forward. The lessons aren't being learned. Your business is doomed before the birth is complete.

Thus, the major watchword is "focus" and staying focused. The objective is to achieve the goal while stamping out the distractions. Staying focused also means recognizing the trivia that can become a distraction and does nothing for aiding in projecting your plans and goals compared with the distractions that are major issues that merit attention and dispatch in resolution. So in many instances, the most important quality is focusing on the future. Another way of saying this is to say focus on achieving the goal.

One of the ways to put order into ones business endeavors and plateaus is to know how to prioritize as well as how to balance the various aspects of the business. And the next important issue in creating balance is to know how to create a healthy work/life balance so that running your business isn't a matter of running to your grave.


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