B-school prof discusses scandal at Fannie Mae

David Sherman, an accounting professor at the College of Business Administration at Northeastern University, recently addressed the scandal at Fannie Mae.

“Regarding them [Fannie Mae] ‘righting themselves,’ I think that it is a bit of a love fest, in that things seemed so bad and it was not clear when the new numbers would arrive,” Prof. Sherman states. “They also did eliminate some of the board members that were not able to catch these problems or prevent them. The accounting problems do add up to big absolute numbers but smaller percentages than some would have liked. The net adjustment to equity was really only about $2billion, they reported restating retained earnings down by $6B and other equity went up $4B. The press underemphasizes the lattter because it is less dramatic and the net of $2B over several years is related to total assets of almost $1Trillion, so it is less than 1% per year.”

Prof. Sherman was an academic fellow at the SEC last year, and was integrally involved in the analysis that led to them requiring a restatement. He also was at the House hearings and some of the internal enforcement hearings, so he also understands the accounting issues and observed the many political elements that influenced the resolution.

Below is Prof. Sherman’s bio:

H. David Sherman, Professor, Accounting Group. A member of the CBA faculty since 1985, Professor Sherman also serves as an adjunct professor at the Tufts University School of Medicine. He has been on the faculty of the MIT Sloan School of Management, and was visiting faculty at INSEAD in Fontainebleau, France, in 1999. He teaches executive and MBA courses in accounting, control, and global financial statement analysis with a focus on high technology, medical technology, financial services, health care, and nonprofit organizations. His current research focuses on financial literacy issues for management and boards in global businesses, financial reporting issues, improving shareholder returns in bank mergers, and managing health care service cost and quality. He is an expert on developing and using financial and nonfinancial measures to evaluate and manage performance. Professor Sherman has served as director, manager, and consultant to financial, healthcare, and high technology businesses, including BankBoston; EMC; KLA; A.T.Kearney (BankAmerica); U.S. Bancorp; Fidelity Brokerage Services (FMR Corp.); CRESAP; U.S. Department of Defense - managed health care programs; Department Of Supply and Services - Government of Canada; and INSEAD. He has also served as a board member and manager of several new ventures from start-up to IPO and sale to acquiring private and public companies. Professor Sherman holds DBA and MBA degrees from Harvard Business School and an AB in economics from Brandeis University. A Certified Public Accountant, he has practiced with Coopers & Lybrand and served on an advisory task force of the Financial Accounting Standards Board (FASB). Professor Sherman has authored two monographs: Accountability - A Key Obligation of Management and Service Organization Productivity Management. His research has also appeared in such publications as Harvard Business Review, Sloan Management Review, Accounting Review, Bankers Magazine, Interfaces, Management Accounting, Journal of Banking and Finance, American Banker, and Medical Care. He is the co-author of Profits You Can Trust: Spotting and Surviving Accounting Landmines (2003).

NHL tries to spin a new Web

In a sports story appearing in The Charlotte News and Observer, Lorenzo Perez writes about the NHL's new deal with YouTube, and how it might bring fresh interest to the league.

In the story, Andy Rohm, marketing professor at the College of Business Administration at Northeastern University, states "I think the appeal of YouTube is it's not a 90-minute or two-hour broadcast of the games. It really packages the excitement and action on ice in small, kind of digestible segments. With the younger demographic, we're dealing with a generation that's kind of characterized by media-consumption ADD. So it's really, I think, a smart vehicle with which to reach these people."

To read the entire story, visit http://www.paradigmshiftpr.com/NHLYouTube.htm

Beyond The Executive Branch

In the January issue of Industry Week, Jonathan Katz writes that companies are moving business intelligence into formerly uncharted areas to maximize its benefits. In the story, Katz notes that "approaches similar to Briggs & Stratton's are driven by 'customer demand for real-time decision making,' according to a recent BI study conducted by Boston Corporate Finance (www.bostoncf.com), a technology-focused investment banking firm."

To see the entire story, please visit: http://www.paradigmshiftpr.com/beyondexecutive.htm

President of M&A International Discusses IBM Acquisition

IBM recently announced its acquisition of compliance specialist Consul. Here are some of the thoughts of Murray Beach, president of both Boston Corporate Finance (www.bostoncf.com) and M&A International:

"This is a very interesting acquisition and is consistent with a strong trend which we are seeing in the security space," Mr. Beach noted. "Enterprises today have a need to monitor their entire network and all interactions within the network in order to fully comply with regulations and to ensure that only authorized employees and contractors are accessing key information. The type of technology offered by Consul addresses this need and allows for the full monitoring of the network and who is actually using and pulling on corporate information."

"This acquisition by IBM is similar to EMC’s acquisition of Network Intelligence earlier this year," Mr. Beach continued. "Network Intelligence has a very robust solution around this same area of monitoring all “network events”. This type of interaction detail has not been important prior to the advent of the highly regulated business environment, but is now essential.

"Recent research shows that most security breaches occur from within the enterprise versus coming in from outside the enterprise. These tools are designed primarily to keep track of the internal access and allow for this clear data for analysis."

For more information about Boston Corporate Finance, please visit www.bostoncf.com.

Will Zune, Wii and PS3 succeed?

People are actively speculating about the possible success and failure of consumer electronics products like Microsoft’s Zune or Nintendo’s Wii. Gloria Barczak, marketing professor at the College of Business Administration at Northeastern University, has been studying the successes and failures of consumer electronics product launches.

“An interesting thing about these products is that Zune is late to market in terms of MP3 players and Wii is not as technologically advanced in terms of graphics, processors, or high-definition video compared to its competitors (PS3 and Xbox). Yet, both products have raised the stakes in their respective markets by providing a unique and worthwhile feature that seems to meet today's consumer lifestyles,” Prof. Barczak states. “For Zune, it's the ability to share your entertainment experiences with others which builds on the trends of blogging, viral marketing, buzz marketing, etc. For Wii, it's the ability to be more involved in the gaming experience which again builds on the trend of consumers interacting with their environment rather than passively watching or listening to things happen. So, both products attempt to achieve two goals simultaneously: to meet our social needs for connection and interaction with others while at the same time, to advance the isolated world of digital technology which can cut us off from these social relationships.”

Below is Prof. Barczak’s bio:

Gloria Barczak, Professor, Marketing Group. Professor Barczak served as assistant professor at Georgia State University prior to joining the CBA faculty in January 1990. She holds a BA from the College of Mt. St. Vincent, an MBA from State University of New York at Albany, and a PhD from Syracuse University. Her research interests include new product development, new product strategy, and managing the innovation process. Professor Barczak is a member of the American Marketing Association, Product Development and Management Association, and the Institute of Electrical and Electronics Engineers. Her research has been published in a number of journals including IEEE Transactions on Engineering Management, Journal of Product Innovation Management, Industrial Marketing Management, and Organizational Dynamics.

B-school prof and expert on corporate governance can speak to backdating options issue

As the media pays increasing attention to the issue of the growing scandals surrounding the issue of backdating of options, I thought you might be interested in the thoughts of Chris Robertson, professor of international business at the College of Business Administration at Northeastern University. One of his areas of expertise is corporate governance:


"One major cost related to backdating exercise dates on tax returns by executives will clearly be a drop in confidence by rank and file employees. With resentment of high stock payouts to executives on the rise this scandal will no doubt trigger angst at the middle management and staff levels. Time and again board of directors and top management team members underestimate the value of a strong corporate culture, and the potential negative implications of what are perceived as behind the scenes deals. To maintain a sustainable level of motivation in the workplace strong leaders must do everything possible to avoid misconduct, or even the slightest perception of unethical behavior. Skepticism is at an all time high and executives must endeavor to steer clear of scandalous situations."


Below is Prof. Robertson’s bio:


Christopher Robertson, Associate Professor, International Business; McCarthy Family Research Fellow. Professor Robertson has a BS in Business Administration from the University of Rhode Island and an MBA and PhD from Florida State University. Prior to joining the Northeastern University faculty, Professor Robertson taught at James Madison University, La Universidad de Salamanca in Spain, Florida State University, and La Universidad San Francisco de Quito in Ecuador. He has also lectured in Israel, Hong Kong and Chile. His professional experience includes work with toy giant Hasbro, Inc. and a number of small businesses, primarily in the restaurant industry. Professor Robertson's primary research stream is cross-cultural management. Specifically, he is interested in ethical, behavioral, and strategic differences across cultures. His work has been published in journals such as Strategic Management Journal, Journal of World Business, Journal of Business Ethics, Management International Review, Journal of Managerial Issues, Journal of International Management, Organizational Dynamics, Journal of Business Research, Business Horizons and the Thunderbird International Business Review. Professor Robertson is a member of the Academy of International Business, the Academy of Management, and the IberoAmerican Academy of Management. In addition, he serves on the editorial boards of the International Journal of Public Administration and the International Journal of Organization Theory and Behavior.