Special Report: Cutting Workers’ Comp Costs

Posted by on Nov 29, 2013 in News | 0 comments

Why should finance chiefs give a hoot about workers’ compensation? For many years, a company’s responsibility for preventing workplace injuries and paying for the lost wages and medical care of employees hurt on the job fell into the hands of specialists. Risk managers assessed the dangers, figured out how much risk to retain and bought the insurance. Internal and third-party administrators handled the paperwork. Loss-control experts worked at safety training and workplace hazard prevention. CFOs were nowhere to be found.

That’s because workers’ comp has long been among the least worrisome financial risks. Companies are required by state law to buy insurance, so that decision was largely taken care of. Claims dribbled in slowly, injured worker by injured worker, posing little threat to income statements or balance sheets. CFOs had a lot more important things on their plate than workers’ comp.

Yet times have changed. The complex regulatory system of 50 state insurance commissioners has grown rife with perverse legal incentives, according to Bill Zachry, the risk manager of Safeway, the food and drug retailer. Interviewed in one of the articles in this special report, Zachry says that when “a claim is litigated, usually the applicant’s attorney is paid by how disabled they make their client appear, not their ability to get their client back to work.”

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Melding Minds With the CIO

Posted by on Nov 29, 2013 in News | 0 comments

cfo-logoMike Herring knows a thing or two about leveraging the relationship between CFO and chief information officer. During his time running finance at Adobe Systems, before he became finance chief of Pandora last February, the information-technology department reported to him. In fact, he worked with the CIO to transform an older back-end system to a more user-friendly one that was more appropriate for a direct-to-consumer subscription business.

When he made the move to Pandora, Herring took what he learned at Adobe and cultivated the same open environment at the online music-sharing company. Although IT doesn’t report to him directly, Herring works closely with the department to create the road map for the company’s back-office systems/

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To Understand HR Standards, Look to GAAP and FASB

Posted by on Nov 22, 2013 in News | 0 comments

John Boudreau

In finance and accounting, “practice standards” (like GAAP) serve a different purpose from “decision standards” like those for financial reporting, with very different requirements.

Independent auditors opine as to whether the companies’ financial statements “present fairly, in all material respects, an entity’s financial position, results of operations, and cash flows in conformity with generally accepted accounting principles,” according to the Public Company Accounting Oversight Board.

A FASB Statement of Accounting Concepts (No. 8, September 2010, page 1, section OB2) defines financial reporting standards a bit differently: “The objective of general purpose financial reporting is to provide financial information about the reporting entity that is useful to existing and potential investors, lenders, and other creditors in making decisions about providing resources to the entity.”

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