Spring 2008 issue of Terry Magazine - (Page 29)

Edwards said of Beresford’s two terms at FASB, underscoring its relevance to professionals and academics alike. It was an era of business history when the New Economy of the 1990s clashed with tried-and-true accounting practices of the past — and Beresford and FASB were the chief watchdogs. “We had the dot com companies that started up, and people were saying, ‘Ignore the fact that they’re not making any money, look to see the eyeballs, the number of people that looked at their site, it’s a better measure of their performance,’” Beresford recalls. “Basically, what was happening is that people were saying, ‘Forget accounting. Forget financial reporting, because that’s sort of the old world. We’re in a new world today. We’ve got to come up with new measures. There’s got to be some new story.’” When the FASB proposed to have stock options classified as a reportable business expense in 1994, it sparked a controversy that became a national debate bordering on the ridiculous. It climaxed with the Silicon Valley business community staging a protest march and pressure from Congress and the Securities and Exchange Commission to potentially end the FASB due to fears that its stock options decision would deep-six the economy. Even more over the top was a somewhat humorous jab from General Electric CEO Jack Welch. Frustrated that Beresford continued to match him point for point on the stock options debate, Welch startled a cabin full of guests on his corporate jet with a mock request to his pilots at an altitude of 38,000 ft: “Is there any way we can get rid of this idiot right now?” “It was almost like a classic Emperor Has No Clothes story, but nobody wanted to say it,” says Beresford of the stock options issue. “Everybody went along with the froth in the market and just Terry College of didn’t want to call attention to some of these things not making a whole lot of sense. In order for stock options to be a positive for the company and for individuals, stock prices had to keep going up over time. So companies started making decisions that were more accounting-related, as opposed to more economically related — and it just kind of built on itself over time. Then when Enron, WorldCom, and a few other high-profile entities imploded almost overnight, the bubble burst pretty quickly.” Beresford’s leadership during the stock options uproar actually placed him in higher regard in the professional and academic communities. “He always had a balanced approach to standard setting,” says current Fannie Mae CFO Steve Swad, who was the SEC’s deputy chief accountant during one of Beresford’s FASB terms. “And as chairman, he had to adhere to established processes — and he did. He did that professionally. And there were a number of difficult issues.” Though Beresford’s reputation didn’t require it, the fall of Arthur Andersen following its association with Enron and WorldCom were indications that Beresford and the FASB’s initial proposal nearly a decade before was the wiser course. In a 2003 statement about the issue, current FASB chairman Robert Herz noted that individual Spring 2008 • 29 BuSineSS upper right: josh weiss; BottoM right: Curtis CoMptoN Courtesy oF risK & iNsuraNCe MagaziNe (Above and opposite page) Beresford’s colleague Linda Bamber summarizes his value to students by saying, “We are the only program in the world where you’re going to learn financial accounting from the guy who used to write the rules.” Adds Terry MBA Director Peter Shedd: “It always impressed me that I’ve never seen him quoted without the Terry College-University of Georgia associated with his name.” (At left) Beresford posing for the cover of Risk & Insurance Magazine. (Above left) Beresford, a Kimberly-Clark board member, with the company’s lead director Robert Dechard at a board meeting in Seoul. (Below left) An avid golfer, Beresford and Kimberly-Clark’s general counsel Ron McCray visit the “The World’s Most Dangerous Golf Course” on the DMz.

Table of Contents Feed for the Digital Edition of Terry School of Business - Spring 2008

Terry School of Business - Spring 2008 Contents Quick Bites Research & Innovation Gatherings Best CEO in America An Unlikely Rock Star Fire & Flavor Beyond the Bench Terry Memo Economic Scorekeeper Class Notes

Terry School of Business - Spring 2008

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.