Bearingpoint Unable To Practice What It Preaches
As reported in CFO magazine, Bearingpoint's financial woes and CFO departures continue with no end in sight. In fact, if the McLean, VA. consulting firm loses one more CFO (Chief Financial Officer), it will have separated with enough former finance chiefs to field a baseball team. I fail to understand how a firm that boasts its expert capabilities to implement business processes, CRM software systems and financial and accounting software systems for clients is so incapable of running its own finances and producing its own financial statements. Now the firm can also exclude CFO retention as a core competency.
Last month, Eileen Kamerick called it quits as Bearingpoint's 8th CFO after just three weeks on the job. While outside intuition might suggest that she uncovered items after accepting the CFO role (that were not disclosed to her prior to accepting the role), the company simply cited "discussions with the audit committee" as the official reason for her departure. At last count, Kamerick was the eighth CFO in the nine-year history of BearingPoint.
With most publicly traded companies, a CFO's early, unplanned and unexplained exit prompts shareholders to exercise extreme caution at the minimum or bail on the stock at the maximum. But with Bearingpoint, investors have seen it all before. "Her resignation is not surprising," says Moshe Katri, an analyst at Cowen and Co. in New York. Even the company didn't feel obliged to supply much more information than the referenced "discussions." According to news reports, Kamerick would say only that she found herself in a different situation than she had expected. That would seemingly mean worse than expected, as it I don't know anybody that bails on a new company because things were far better than eluded to during the interview discussions. The giant consultancy, which was of course originally part of the Big Four accounting firm KPMG, has a history of accounting errors. In 2004, a $93 million accounting error ultimately resulted in the resignation of CFO Mark Falcone a requirement for the company to restate its financials back to 1999. Bearingpoint has also incurred a series of legal troubles with the US government regarding professional services delivery for government projects. Several government legislatures suggest that Bearingpoint should be banned from future government work.
Taking on the CFO role is "no easy task," says Katri. "In fact, these factors make it very logical for anyone who's going to look at this job to consider it challenging." Now all eyes are glued to CFO number 9, who happens to be former audit-committee member Eddie Munson. No doubt his days will be full, but on the plus side, he only needs to hold the job for 28 months to qualify as BearingPoint's longest-serving CFO.
Post: July 20, 2008 in Strategy | Permalink | Comments (2) | TrackBack (0)
Tags: AICPA, SAS70, erp software consulting
Comments to hailey[at]haileyblog.com
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As a senior consultant who still works at BearingPoint, you comments hit several root problems however do not begin to address the enormity of the troubled situation. Employee turnover hovers near 50% annually. Culture hovers at lower levels than I've ever witnessed during my professional career. Excuses run rampant and accountability is mixed at best. The firm has potential and many good people remain, however, leadership continues to fail its stakeholders, shareholders, clients and employees. I personally see no emergence without outside help - seemingly in the form of being acquired and injected with new leadership.
Posted by anonymous on August 15, 2008
I work at the company (for now). It's been my observation that there are two types of staff remaining. Those who clearly see the demise unraveling and are simply buying time to find employment elsewhere and those who live in a vacuum and quite consciencely choose not to face the obvious. Somebody please buy us!
Posted by anonymous on April 11, 2008
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