Tuesday, December 22, 2009

Peter Scanlon: A Voice Heard From

I'm a PMA Guy — positive mental attitude being my fundamental mindset. But I have to say that there was a lot to not like about 2009 — such as the number of my past authors who passed away this year. Since January this blog have been riddled with obit tributes to distinguished executives who have graced the pages of Directors & Boards while I was their editor.

Peter Scanlon, a former chairman of Coopers & Lybrand, died on Dec. 3 at the age of 78. As the New York Times obit recounts, he led the then Big 8 accounting firm from 1982 to 1991; the firm merged with Price Waterhouse in 1998 to form PricewaterhouseCoopers.

Mr. Scanlon wrote an article for me in 1984 that addressed several significant proposals being put forward by the Financial Accounting Standards Board. "Brace for More Change to the Balance Sheet" we titled his article. The accounting changes he felt moved to do a heads up on are somewhat moot now a quarter of a century later. But one point he made in his article still has pertinency today as a governance leadership principle.

"Setting new accounting standards isn't an easy job because of the many different interests that need to be considered," he wrote. "It's not unusual for academicians, analysts, accounting firms, businesses and, of course, the general public to all see the issues involved from different perspectives. There is no argument that the ultimate goal should be to provide more and better information. But given the complexity of many of the standards and the diversity of financial statement readers, it's inevitable that this goal won't be achieved to everyone's satisfaction.

"America's companies are the ones ultimately responsible for implementing and explaining the impact of accounting changes to shareholders, lenders, and employees, and for adjusting to cope with any new standards. You — CEOs and others who serve on boards of directors — must be involved to make sure your companies are on top of the business implications of any changes and are making your views heard. The FASB listens to its constituency as it addresses issues and attempts to solve problems. You should be key participants in that process."

Peter Scanlon was making his views heard, and I am glad that he was doing so in the pages of Directors & Boards. That voice of business leadership is now silenced.