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CAROL B. TOMÉ IS ONE OF THE MOST POWERFUL PEOPLE IN BUSINESS TODAY. She is both executive vice president and chief financial officer for The Home Depot, the world's largest home improvement retailer, and chair of the audit committee for UPS. She understands both what directors need and what a CFO should provide to ensure good corporate governance.
She joined The Home Depot in 1995 and rose to become CFO in 2001. She is now responsible for all the company's corporate finance matters, including financial reporting, financial planning and analysis, financial operations, divisional finance, internal audit, investor relations, treasury, and tax. In this interview with Strategic Finance, she speaks candidly about the challenges and benefits of the Sarbanes-Oxley Act.
SF: When you began your accounting career, did you imagine that accounting would become so closely aligned with corporate governance in the way it is today?
Tomé: I think finance leaders understand the responsibility, from a fiduciary perspective, to do the right thing. As a finance leader, I've never been confused about the role I have with the shareholders, the associates, the customers, and my family to do the right thing.
At The Home Depot, we've always had the right tone at the top, and by that I mean (CEO) Bob Nardelli will say "no winking, no blinking" when it comes to compliance-not just with the letter but with the spirit of the law. It has always been the right tone at the top.
When you look at some other companies, they didn't have the right tone at the top-the Enrons and HealthSouths...the list is very long and covers some very large companies.
Then there were legislative acts like Sarbanes-Oxley and new rules from the Securities & Exchange Commission, the New York Stock Exchange, the Financial Accounting Standards Board, and the Public Company Accounting Oversight Board. Because some companies didn't have the right tone at the top, all of us are paying the dues for a select number of companies.
SF: What has Sarbanes-Oxley's impact been on Home Depot?
Tomé: For us, in many ways, it was business as usual. But, clearly, we are a better company because of SarbanesOxley. We went through our internal documentation and testing of internal controls and found opportunities for improvement....