Month: November 2012

Leadership transitions are a natural part of the business cycle. However, when high-level vacancies are unexpected, companies can be left scrambling to react.

For instance, The Wall Street Journal recently reported that Intel CEO Paul Otellini has announced his impending retirement. This move came as a surprise, as the 62-year-old had been expected to retain his position until he reached age 65, at which point retirement would be mandatory under the company’s rules.

In a press release, an Intel spokesman stated that “the decision was entirely Paul’s,” and that the company’s board “accepted his decision with regret.”

The forced leadership transition comes at a critical moment for Intel, with rising sales of smartphones and tablets leading to reduced demand for the PC chips that make up the core of the company’s business. Although the chip-maker has been positioning itself to compete more effectively in the shifting market, it will continue to face significant competitive pressure on price and performance as it seeks to adapt.

The Journal suggests that Intel has historically shown a strong preference for promoting experienced internal talent to top leadership positions, with all five of the company’s chief executives having been promoted from within the company. However, Otellini’s presumed heir, Sean Maloney, has announced plans to retire after suffering a stroke.

The company is now reportedly looking at a number of candidates to replace its outgoing CEO, including professionals from both in and outside of the business.

Whether a company finds itself in a contingency situation due to an unexpected departure or is looking to find a long-term replacement for a sitting corporate officer, recruitment firms can aid in the conduct of a fast, effective executive or financial professional search.

On November 15, the Department of Justice announced that British Petroleum (BP) will plead guilty to a variety of criminal charges and pay a $4 billion penalty in connection with a 2010 oil spill that occurred in the Gulf of Mexico after an explosion on the offshore drilling rig Deepwater Horizon.

According to Attorney General Eric Holder, BP has agreed to plead guilty to 11 counts of felony manslaughter, obstruction of Congress and violations of the Clean Water and Migratory Bird Treaty Acts.

Simultaneously, the London-based oil company reached an agreement to pay $525 million to the Securities and Exchange Commission (SEC) to settle charges that it committed securities fraud by releasing false information about the amount of oil being spilled into the Gulf.

The company still faces a number of additional liabilities. A federal judge is currently reviewing a proposed $7.8 billion settlement between BP and over 100,000 Gulf Coast residents and businesses. Meanwhile, federal and state officials continue to seek billions of dollars to address environmental damage caused by the 2010 spill.

David Uhlmann, director of the environmental law and policy program at the University of Michigan, told The Associated Press that, although the case resulted in a record-setting fine, BP could have faced even harsher penalties, due to the immense impact of the oil spill.

Project consultants can help companies plan for possible contingencies

A more thorough consideration of the potential liabilities that could stem from a drilling accident may have spurred BP to make additional investments in well safety during the early stages of the Deepwater Horizon project. In turn, this could have kept the company out of its current predicament.

Companies that are in need of such analytical expertise can benefit from working with a firm that provides financial project consulting services.

Current and former chief financial officers (CFOs) are increasingly seen as valuable additions to corporation’s boards, according to new research from Ernst & Young.

The firm’s final report is based on a survey of 800 global CFOs and a more in-depth study of the career paths taken by 347 CFOs working at major companies with over $5 billion in annual revenues, as well as interviews with executives, governance experts and academics.

Among respondents to the CFO survey, 79 percent said they believe that their financial expertise has driven an increase in demand for them to serve on corporate boards.

Furthermore, information from the career path study showed that, among the major companies looked at, 14 percent of their board members were current or former CFOs. This represented a considerable increase over 2002, when the figure was only 8 percent.

Over the same period of time, the proportion of audit committee chairs who are former or current CFOs has more than doubled, rising from 19 percent in 2002 to 41 percent in 2012.

“Regulatory pressure is driving a major increase in demand around the world for CFO experience on boards,” Ernst & Young’s Jay Nibble explained in a press release announcing the results of the study. “Additionally, as companies grapple with a volatile economy and the diverging growth trends of developed and rapid-growth markets, they increasingly want good insights and support for cost, risk and cash flow management – three areas of focus that fall squarely within the CFO’s skill set.”

Corporate recruiters can help companies connect with leading talent through a financial professional search, whether they are looking to fill CFO jobs or find qualified financial experts to serve in other roles.

Now that the election is over, political and business leaders in the United States are turning their attention toward the future. Of particular concern for financial professionals is the ongoing design and implementation of new federal regulations regarding corporate financial practices.

After President Obama officially begins his second term next year, it is widely expected that there will be a shakeup of key personnel, both within his cabinet and among the federal government’s various regulatory agencies.

Treasury Secretary Timothy Geithner has announced his intentions to leave office when the next term begins, while Mary Schapiro, head of the Securities and Exchange Commission, is also expected to resign.

Meanwhile, Federal Reserve Chairman Ben Bernanke’s term ends in January, 2014, potentially setting the stage for a wide-ranging debate about monetary policy and the role of the nation’s central bank.

The Wall Street Reform and Consumer Protection Act – commonly referred to as “Dodd-Frank,” in reference to its sponsors – looks set to remain the law of the land, with President Obama reelected and a Democratic majority returned to the Senate. However, the law has only been partially implemented, with many rules yet to be designed.

The New York Times reports that the U.S. Chamber of Commerce and other groups are “marshaling teams of lawyers” to file lawsuits against some of the reform act’s most contentious provisions.

Whatever lies ahead, firms will need fiscal expertise to adapt to conditions

As legal challenges focused on new regulations move forward, uncertainty about the future may rise precipitously before being brought down by court decisions. Alternatively, appeals or ambiguous rulings could amplify the confusion.

Recruitment firms can help businesses gain access to the expertise they need to move forward by adding qualified experts to their staff. Through a targeted financial professional search, corporate recruiters can aid companies in identifying, evaluating and selecting talented candidates for CFO jobs or other important positions.

The Bureau of Labor Statistics (BLS) released its Employment Situation report for the month of October and the new figures seem to show a strengthening U.S. economy. According to the agency’s data, nonfarm payroll employment expanded by about 171,000 jobs last month.

In addition, the job creation numbers for August and September were revised upwards, reflecting a net increase of 84,000 payroll positions that had previously been unaccounted for in the official data.

Despite these gains, the unemployment rate increased slightly, inching up from 7.8 percent to 7.9 percent. However, in a way, this may represent a positive development, as it indicates that more Americans, who were previously discouraged, are now actively searching for work.

Monthly reports are less reliable than long-term trends

In an opinion piece published by the Christian Science Monitor before the BLS data was released, Robert Reich – formerly the Secretary of Labor under President Bill Clinton – advised the public to take the jobs report “with a grain of salt.”

“Month-to-month reports shouldn’t be taken nearly as seriously as they are,” wrote Reich. “It’s the long-term trend that counts.”

The former cabinet official went on to assert that, regardless of the specific figures reported for October, the big picture was encouraging, with consistent, if relatively slow, growth in employment throughout the year.

As the economic recovery continues, businesses will find themselves presented with many new opportunities. Specialized recruitment firms can help companies ensure that they have the fiscal expertise they need to be able to effectively evaluate and capitalize on changes in the market, by conducting a targeted financial professional search.

In this year’s July/August issue, the Harvard Business Review published a study that focused on “high-achiever” professionals in their 30s.

The researchers behind the study, Monika Hamori, Jie Cao and Burak Koyuncu, interviewed 1,200 of these individuals regarding their job search behavior. Specifically, the young professionals were asked about the activities they engaged in when they were already employed.

Among the participants in the study, 75 percent said they “sent out resumes, contacted search firms and interviewed for jobs at least once a year during their first employment stint.”

Furthermore, 95 percent reported that they regularly engaged in “activities such as updating resumes and seeking information on prospective employers.”

Retaining talent more effectively requires a focus on “fit” in the hiring process

In this area, there are many suggestions bandied about by media commentators, but a great way for a company to approach the challenge of talent retention is to focus on hiring professionals who are not only qualified for their positions, but offer a good fit with the company’s established organizational culture. This is a proactive policy that can do more to secure the loyalty of high-achieving professionals than any retroactive strategies for improving employee engagement.

Today, it is even more important to ensure that new hires will be able to effectively settle into their positions, as online job searching tools have made it easier for talented professionals to conduct non-stop searches, even while they are employed. Given the spread of Web-based social and professional networks, this effect will most likely continue to be amplified in the future.

Recruitment firms help a business evaluate and recruit well-suited candidates through a targeted financial professional search.

Nonfarm employment in the private sector continued expanding last month, according to a report from ADP. The company’s most recent National Employment Report showed a net increase of 158,000 jobs – on a seasonally adjusted basis – during the month of October.

Mark Zandi, chief economist at Moody’s Analytics, put the monthly report’s results in the context of larger trends, which see the U.S. economy growing and employment expanding, despite lingering uncertainty.

“Businesses are adding consistently to their payrolls,” said Zandi. “October’s job gains were in line with the average monthly gains of the past two years, with sturdy albeit less than stellar growth across most industries and company sizes. Businesses have turned more cautious in recent months, but that has yet to impact their hiring and firing decisions.”

In another positive sign, The Conference Board released its updated Consumer Confidence Index, which saw an increase from 68.4 to 72.2. The current level is the highest the index has been all year, according to Lynn Franco, the organization’s director of economic indicators.

“Consumers were considerably more positive in their assessment of current conditions,” said Franco. She went to assert that she saw “improvements in the job market as the major driver.”

With business conditions slowly, but steadily, improving many companies may be looking to take advantage of new developments. The experts at a financial project consulting service can help businesses identify, evaluate and capitalize on the market opportunities that are available to them.

Alternatively, for companies that are looking to improve their internal capacity for financial analysis, working with a recruitment firm to conduct a targeted financial professional search can be the ideal solution.