Hillenbrand Industries Inc. CFO Scott K. Sorensen now has some idea of what it's like to be under fire. And no, that doesn't mean the Batesville, Ind., company has been hit by shareholder suits or SEC investigations.
Sorensen recently visited the Civil War battlefield of Gettysburg, Pa., with his CEO and 10 other Hillenbrand executives. As the men crossed the site of Pickett's Charge, their guide, retired U.S. Army colonel John O'Shea, halted them, formed them shoulder to shoulder, and ordered them forward — just as 12,000 Confederate Army soldiers once marched into the face of massed Union artillery and rifle fire.
For Sorensen, it was a profound moment. "There was a feeling of unity these men must have felt — you didn't go into battle for yourself; you did it for the guy on your left and the guy on your right." The experience brought the executives closer, too.
Once a family-run health-care and funeral-services company, Hillenbrand recently revamped its upper ranks, replacing two-thirds of its senior management. That raised the level of professionalism, but left the company with gaps in communication and institutional knowledge. Seeking to rally his new team together, CEO Fred Rockwood contacted the Washington, D.C.-based Reserve Officers Association, which offers lessons in leadership based on the 140-year-old battle.
A salient point for Hillenbrand: Confederate general Robert E. Lee lost many of his trusted senior commanders before Gettysburg. "He was dealing with new people," notes Sorensen. "It's clear Lee suffered from communications issues." By contrast, Union colonel Joshua Chamberlain received unambiguous orders to defend the Union flank at all costs. When his regiment ran out of ammunition, he ordered a bayonet charge — a move that saved the battle for the Union.
"Lives may not be lost in business," says Sorensen, "but the lessons [of war] are really relevant." He says the post-tour workshop that applied those lessons to Hillenbrand resulted in organizational changes. "It was a very powerful experience." So powerful that he went back last month, this time with his senior finance team. — Tim Reason
CFOs On The Move
Owens-Illinois Inc. names Thomas L. Young, a 33-year veteran of the glass and plastics company, as its new CFO. Previously EVP of administration and chief counsel, he replaces Scott Trumbull, who became CEO of Franklin Electric Co. in December.
Chris Liddell becomes CFO of International Paper Co., replacing John Faraci, who becomes company president.
BearingPoint Inc., formerly KPMG Consulting Inc., appoints Robert S. Falcone as CFO. He was CFO of electronics retailer 800.com. Falcone replaces Robert C. Lamb Jr., named CFO of FleetBoston Financial. For more CFOs on the Move, go to www.cfo.com.
How Much Is Not Enough?
Will Weston Smith and William T. Owens, who admitted they helped commit massive accounting fraud at HealthSouth Corp., get off with a slap on the wrist in exchange for their testimony? It's unlikely, say observers, but the two former CFOs probably won't serve maximum sentences either. Their terms depend on whether they, and other HealthSouth employees seeking plea deals, help prosecutors nail former CEO Richard M. Scrushy, the alleged mastermind of the fraud.
Owens's plea deal indicates that if prosecutors are successful in their attempts to throw the book at Scrushy, it could be a boon for Owens and Smith. The deal says that if prosecutors feel Owens has "cooperated fully [and] provided substantial assistance" in the investigation, they will file a motion that allows the judge to impose a sentence below any mandatory minimums.
That could defang one of the most-celebrated aspects of the Sarbanes-Oxley Act: a 20-year maximum sentence for certifying false financial statements, a crime both men committed. Much lower sentences for that crime would make for an inauspicious debut for the new law. (Both men pleaded guilty to conspiracy, wire fraud, securities fraud, and other charges.)
"Everyone in enforcement is keenly aware of not wanting to appear limp," says Phil Feigin, an attorney with Rothgerber, Johnson & Lyons LLP, in Denver, and the former securities commissioner in Colorado. 'There's no way they're going to let someone off lightly." He adds that the judge will impose the final sentence and "will be in a position to correct any perceived errors in judgment by the prosecutors." — Kris Frieswick