Some Random Thoughts

Christmas week is no time for lengthy essays. So herewith are a few quick thoughts spinning off the week's news.

The climate change negotitions in Copenhagen and the damp squib that emerged proved two things:

1. Global problems, like global warming, demand global solutions, not national ones, that must be overseen by global organizations.

2. Getting this job done will be the work of years, not a fortnight in Copenhagen.

Sen. Tom Harkin, the Iowa Democrat, called the new health bill "not a mansion but a starter home." He could have said the same about the Copenhagen compromise.

But it's a start.

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Speaking of the health bill, the final Senate version droppped a proposed tax on cosmetic surgency, but replaced it with a tax on tanning salons. That figures.

Most cosmetic surgery is done by wealthy cosmetic surgeons for wealthy patients who can afford the high fees. Most tanning salons are like the ones on Midwestern main streets, tiny places owned or franchised by a farm wife or factory worker, trying to make a few extra dollars by giving a cheap tan to locals who can't afford to spend the winter in Florida.

Cosmetic surgeons have lobbyists. Tanning salons don't.

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It seems that Tiger Woods is being cast adrift by Accenture, which is scrambling to erase his image from its advertising, as surely as former Soviet leaders like Nikita Khrushchev vanished into unperson-dom once they became an embarrassment.

This is odd. Tiger Woods and Accenture have much in common. Accenture, after all, is the company that emerged from the wreckage of the Chicago-based accounting frim, Arthur Andersen, when that icon, like Tiger, got distracted from what it did for a living.

While it was paying Woods those big fees, Accenture could have been even more useful by advising him how to keep his eye on the ball. 

Comments

[Accethics]

Accenture partners claim that the company enforces high ethical standards but the facts shows differently.
Douglas Scrivner responded to a SEC related to the reestructuring costs that http://www.sec.gov/Archives/edgar/data/1143908/000095013706000977/filename1.htm
“The partners did not pay the tax liability at the time of the reorganization transaction because the Company and its external advisors felt there was a reasonable possibility of a favorable outcome. The Company and its external advisors believed the tax positions related to the restructuring transactions were appropriate and supportable under local tax law and the Company intends to defend, as needed, tax positions taken by the partners. A favorable outcome is still possible through either issues not being identified on audit by tax authorities, a successful defense of the position, or expiration of the statute of limitations, so it is not appropriate to pay the tax liability at the time of the transaction, or at any time, unless administrative and legal processes have concluded and resulted in an actual unfavorable outcome.”
In page 16 of the "NOTICE OF THE 2010 ANNUAL GENERAL MEETING OF SHAREHOLDERS"
( http://www.sec.gov/Archives/edgar/data/1467373/000119312509251604/dpre14a.htm ) is stated:

"Senior Executive Tax Costs
The Company has informed approximately 2,500 of our senior executives that if the senior executive reported for tax purposes the transactions involved in connection with our transition to a corporate structure in 2001, the Company will, in certain circumstances, provide a legal defense to that individual if his or her reporting position is challenged by the relevant tax authority. In the event such a defense is unsuccessful, and the senior executive is then subject to extraordinary financial disadvantage, the Company will review such circumstances for that individual and find an appropriate way to avoid severe financial damage to that individual."

In the newspaper el Mundo there was informed that Accenture (and therefore all shareholders) have paid 110 million euros, plus the penalty related with the unpaid taxes of the 100 Spanish Partners in 2001 reestructuring.
http://www.elmundo.es/mundodinero/2008/06/20/economia/1213922650.html
If now as declared there are 2500 senior executives that might be in the same situation, it is stright forward to have a direct correlation of the possible personal tax impact on former senior executives that Accenture is commenting it might be paid by the company and therefore by all Accenture shareholders.

Which ethical standards are higher, Mr. Wood's or Accenture's?