by Glenn Cheney

Florham Park, N.J. - What a time to take the helm of Financial Executives International, the country’s leading association of financial officers. Investor confidence is in the pits. The audit profession is in upheaval. Technology is racing forward while financial officers pound the streets in search of a career transition.

And along comes Colleen A. Sayther, to replace Phil Livingston as the institute’s president and chief executive officer.

Sayther recently joined the FEI from a fast-track rise through the corporate sector. Some 19 years ago, she started her career at the then-Big Eight accounting firm of Touche Ross. Soon after, she became assistant controller of AT&T Capital during its years of rapid growth

 From there, she moved up to become vice president and chief accountant at AT&T Corporate. And from there, she leaped to Havas Advertising, where she served as senior vice president and chief financial officer, North America.

It’s the kind of career development you expect for someone who goes to the beach with three kids and an exposure draft. It should be no surprise, then, that one of Sayther’s primary concerns as the chief of an international not-for-profit organization is the international for-profit concern over investor confidence.

“Investor confidence seems to be something that’s on the mind of most of our members and chief financial officers in general,” Sayther said. “One of our goals this year is to do what we can to restore investor confidence.”

Sayther has no intention of improving investor confidence by telling investors to be confident. She’s pursuing the substantive changes that will give investors solid reasons to be confident.

She has been visiting FEI chapters to encourage members to take active leadership positions in promoting a proper and consistent tone at the top of corporate management. The FEI is promoting transparency and enhanced governance. Sayther wants to see transparency accomplished - not with more stringent accounting standards - but with simpler, more up-front disclosure in financial reports.

Accounting standards themselves can be helpful, she said, if they are more “intellectually honest.”

Exploring that concept, she cites “the travesty that occurred with the original stock options proposal” of the Financial Accounting Standards Board. Against great resistance from the corporate sector, the board proposed expensing stock option compensation. Congress got involved and, ultimately, the Senate passed a non-binding resolution asking FASB to drop the project. The board backed down, dropping the requirement to expense such compensation, requiring only that it be disclosed in a footnote.

“Congress doesn’t have the background to dictate accounting standards,” Sayther said. “Now FASB has come out again in favor of expensing stock option compensation. The FEI’s position is that many companies already expense it, and others are disclosing its value. The information is already there, but we do believe that stock options have value. To be intellectually honest, we need to consider the value that stock options have on profits and loss. Congress isn’t in the standards business, and I don’t think they want to be.”

Sayther also wants the FEI to take a better focus on its members to see what they want from the organization. She wants to better understand the FEI’s “value proposition,” and she wants the FEI to create time for its members, not take time from them.

She also wants to help them find jobs. “We have a lot more members in transition than we used to have, particularly in Silicon Valley, New York and New Jersey. We’re going to enhance our career services for help with career transition. We are doing our best to accommodate the unfortunate economic situation.”

FEI members who are between jobs are entitled to retain their membership at a reduced rate during their transition period. Sayther also intends to help FEI members deal with the avalanche of new regulations that have come down on chief financial officers.

“We have a love-hate relationship with these corporate regulatory reforms,” she said. “In some cases, they’re good in that they elevate the role of the CFO. Most CFOs think their value has increased because of all the changes. On the other hand, the internal control documentation required for audits is rather onerous, so we have to reassess the cost-benefit. A lot of people are spending an inordinate amount of time making sure that the documentation is in a format that their auditors will be able to attest to.”

Sayther sees that problem rubbing up hard against problems in the audit profession. “It’s no secret that the audit process needs an overhaul,” she said. “The accounting standards of the past have been rule-based, and this has motivated bankers, accountants and lawyers to create products that get around the rules, ˆ la Enron.”

“Whole industries have popped up,” she continued. “Also, because of the many new services that audit firms were offering in the 1990s, audit partners were yielding too much to management. Partnering went too far. The audit firms need to get back to auditing.”

Part of the solution, Sayther said, is to move toward principles-based accounting. She sees problems with that shift, however, as lawsuits attempt to make up for financial problems and audit firms become de facto standard-setters.

She is encouraged by the creation of the Public Company Accounting Oversight Board, which will soon be setting audit standards. The prior system of having the American Institute of CPAs set standards was, in her words, “kind of like having the fox in the henhouse.”

It is worth noting that the FEI has appointed another woman, Isabel Meharry, as president and chief executive of FEI Canada.

Sayther says that the FEI has taken up an initiative to figure out why women make up only 10 percent of the FEI’s members. While that figure is significantly higher than the estimated 7 percent of Fortune 500 CFOs who are women, the figure for all companies is unknown.

The deeper question, of course, is why slightly more than half of accounting students are women, while so few rise to the top of the profession.

Colleen Sayther is certainly in a position to find out, and probably will.

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