Barely a month ago today, the WSJ published a glowing article about Erin Callan, Lehman’s now former CFO, complete with sexy picture. (I think those are the T-strap Louboutin’s I covet…)
In retrospect, it is easy to see the error of her ways for taking the job and of Lehman’s management for appointing her. What public company, of the size and stature of Lehman, in trouble already, can afford to have a CFO who is not an accountant? Have we not seen what happens when a CFO has no interest or aptitude for GAAP?
I can understand the desire, literally and figuratively, to put an otherwise smart and self-confident woman in this job, someone who could distract the media and analysts from the issues being raised, the icky accounting type issues publicized, by shorts such as Einhorn.
“Yeah, I guess I will wear the shorter dress with stilettos on CNBC today. Yeah, that’s the ticket.”
It’s not that I don’t think a smart, successful woman can be sexy too. Duh! It’s what I strive for. But I know better than to expect to be a CFO of a multi-billion dollar global company. And I passed the CPA exam and like analyzing SEC filings. If only I had been the first one to say it…
And now they are doing it again. Mr. Lowitt, the new CFO, being promoted from Treasurer, is not an accountant either, but a former McKinsey consultant. Will they never learn?
If I were Ernst & Young, their long-time auditors, I would consider the ongoing lack of knowledge and interest at the top regarding accounting details and GAAP, under the precarious circumstances which exist, to be a material weakness in internal controls over financial reporting. As usual, Lehman has an unqualified opinion on both their internal controls per Sarbanes-Oxley requirements and their overall financial statements as a whole as of the end of 2007.
From the WSJ:
Six months into one of investment banking’s toughest jobs, the 42-year-old Ms. Callan is emerging as a galvanizing force at Lehman and a finance chief who topples much of the conventional wisdom about CFOs. She also is the highest-ranking woman on Wall Street. Many Lehman insiders consider her among the contenders to become the firm’s president someday.
Unlike Lehman’s two previous CFOs, Ms. Callan isn’t an accountant and had never worked in the finance department.
She embraces television, appearing frequently. She receives a slimmer daily financial summary than her predecessors, relying more on data from the trading-floor contacts built during her 13-year Lehman career.
“We have a lot of great finance people here,” she says. “In the CFO seat in this environment, I find it is important to be able to look at the sum total of the information quickly and test conclusions as well as read the reports on my desk.”
…Ms. Callan, who is undeniably fashionable, has received sexist emails from TV viewers. But she has no plans to dial back her persona. Tina Sussman, her personal shopper at New York retailer Bergdorf Goodman, has started sending racks of clothes to Ms. Callan’s house because the CFO’s schedule is so hectic. Ms. Sussman describes Ms. Callan’s style as “classic and elegant.”
Ms. Whitney, the Oppenheimer analyst, jokes that Ms. Callan is the “best accessorized” CFO on Wall Street.