Mar 27, 2003

Top says:

The integration of Razorfish, Scient and Lante by SBI and Company is proving a great success, according to Ned Stringham - President and CEO of SBI (for full details click below)

It has emerged this week that Deloitte & Touche is to become the last of the Big Four accounting firms to adopt limited liability status. The move, which would protect partners from Enron-style legal action against the collective firm, both reduces risk for the existing partner pool and also makes it easier to attract senior hires - who might otherwise have been nervous of joining the firm.

The other Big 4 rivals - PricewaterhouseCoopers, Ernst & Young and KPMG - have already changed their legal status.

Limited liability effectively means that future liability for failed audits will be limited to the individual partners involved in that audit, leaving others in the partnership untouched. The trade-off is that firms must make their accounts public, something the audit professional has historically avoided.

I wonder will this liberate them?...or does this mean more creased brows on the furrows of clients and shareholders?

Directors of EDS have forced Dick Brown to step down as CEO of EDS. It was Brown who initiated the aggressive growth strategy that saw EDS pursue high-profile "mega deals" - some commentators believe at the expense of more traditional business.

Apart from diverting resources, the "mega deals" have also hit EDS financially as they have left the company highly vulnerable to bankruptcy filings. Two major clients have filed to date, and EDS has also encountered problems with 2 government contracts. Following profit warnings in 2002, the company warned in February that it was at risk of not meeting its 2003 earnings target. A major strategic review has been underway since this time, and a change in leadership was seen as critical to reassure investors and drive through necessary changes.

"The EDS Board of Directors and Dick Brown mutually agreed it is in the best interests of the company to effect a leadership change at this time," said Roger Enrico, an EDS director.

Michael Jordan, formerly head of CBS, was named chief executive and chairman of EDS. The board also enticed EDS veteran Jeffrey Heller out of retirement to become president and chief operating officer.

Mr Jordan, formerly a consultant and principal with McKinsey & Company, will now rethink EDS’s entire business strategy. The strategic review is expected to be concluded in the next two months. One of the issues likely to be under consideration is whether EDS should make a major consulting acquisition to parry that of IBM, recent acquirers of PwC Consulting

For the official press release see:

BearingPoint - formerly KPMG Consulting - has this week named Robert Falcone as its new CFO. Robert Lamb, BearingPoint’s previous CFO, parted company with BearingPoint in December to join FleetBoston Financial.