SUMMER 2008
Thinking About
Retirement? YOU SHOULD BE
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what’s inside
BGS Corporate Contributors and Affiliates 2008
2
A Message from the BGS President
3
Letters to the Editor
4
Thinking About Retirement?
8
Social Security: A Basic Human, Economic Contract?
Beta Gamma Sigma thanks those organizations that generously support the Society’s programs and services
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8
Helpful Hints for Planning Your Retirement
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10 Women and Retirement
College Loan Corporation (CLC) GEICO
12
BGS Member Survey Results: Lifetime Member Opinions and Behaviors Regarding Retirement
Graduate Management Admission Council (GMAC) KPMG and the KPMG Foundation
13
The Anatomy of Trust: 2008 International Honoree Chung Po-yang (Po Chung)
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A Message from the BGS President
will continue with me for the next two years, I look forward to working with you on important projects like Ethical Business Leadership, the 100th anniversary, and much more. These are exciting times and our lifetime members deserve our very best. I’ve been amazed at the level of excitement and engagement by our membership. I receive letters from “The past is a source of knowledge, and the future members offering assistance, suggestions, praise and is a source of hope. Love of the past implies faith in concern, and I’ve appreciated the opportunity to work the future.” - Stephen Ambrose with you. Please know your honor society cares deeply about you and your needs so don’t hesitate to express your thoughts. t’s hard for me to believe that two years have passed since Now, looking over the last two years, how did we really I became president of Beta Gamma Sigma. I have enjoyed perform? Did we do all of the things we expected of ourselves? every minute of it, whether dealing with the significant Did we do the things you’ve come to expect of us? triumphs or the critical challenges that faced the Society. It has Did we continue to accomplish our Mission? The answer been a pleasure to serve you, the lifetime members, and to work is yes. We recognized and honored educational achievement, with so many outstanding people along the way. and we expanded that recognition to new schools that earned As the quote above implies, I have great hope for Beta AACSB accreditation. We continued to expand globally, Gamma Sigma’s future because of the successes of the past and attracting membership from schools around the world. We the people responsible for those successes. I am proud to have offered more to our lifelong members through affiliations, been part of an incredibly dedicated Board of communications and other services. We Governors – a truly great team, in every sense added and strengthened alumni chapters. of the word. Sara Freedman, the Immediate We communicated better with members Past President, has offered tremendous through an improved magazine, website guidance at every turn, and her counsel will and newsletters. We created an initiative that be missed when she steps down from the will remain a focus for many years, Ethical Board June 30. Business Leadership. Also leaving the Board this summer Could we have accomplished more? Of are Otis Thomas, Carl Gooding and Ken course. If the answer was no, it would mean Stanley. Each has given much, and I thank that we did not set our goals high enough. them all for their generosity and dedication. That is a sin I never want to commit. So I Carl and Ken have been the leading forces look forward to my next two years on the driving the development of the Student Board as an opportunity to help us meet new Leadership Forum Program. The more than challenges. 1,000 students who have benefited from We must prepare to make our second participation in this program have them to century as an honor society – and the largest thank. network of business scholars in the world – Emily Resetco, a senior from James better than the first. We must continue to Madison University, echoed the thoughts find additional ways to add value to the BGS President John Wholihan at the 2008 of so many of her peers at the Winter 2008 lifetime membership. We must become a vital International Honoree Luncheon, held April 15, 2008 in Honolulu, HI. Forum by noting: resource for the promotion of Ethical Business “This experience was like nothing I have Leadership to our members and the business ever participated in before and it amazed me. world. These are just a few of our goals as we I am leaving the Forum with a new perspective on leadership move forward. and a continued passion for business. Thank you!” Two years ago, in my first “Message from the President,” I envision a bright future for our Society because I I shared how excited I was to work for and with you. Today, recognize the talent and dedication of its next set of leaders. that feeling of excitement has increased. The more I know Beta I’ve gotten to know George E. Stevens, dean of the College of Gamma Sigma, the more its Mission becomes part of me. I Business Administration at Kent State University, well over the sincerely hope Beta Gamma Sigma has become a bigger part of years, and I’m confident that he will lead Beta Gamma Sigma to your life as well. Continue to let us know how we can make that new heights. He takes over as president July 1, and the Society happen for you. will flourish under his leadership. I would like to leave you with a final thought. I issued In addition, I would like to congratulate Robert D. Reid, a two-part challenge at many of the BGS functions I have dean of the College of Business at James Madison University, attended. Now I issue it to all members: for his election as vice president, and James K. Weeks, dean of a) Take your pin out of your jewelry box and the Bryan School of Business and Economics at The University WEAR IT ONCE A WEEK. If you don’t have yours anymore, of North Carolina at Greensboro, for his election as the Society’s order a replacement from the BGS Store next secretary-treasurer. These men combine a firm grasp of (www.betagammasigmastore.org). the Society’s history with a clear vision for its future. As we b) Prepare yourself to respond clearly and quickly to the approach the 100th anniversary in 2013, I know they are the right question, “What is that?” You will be surprised how good it individuals to move Beta Gamma Sigma forward. makes you feel. I’ve been honored to serve on the Board since 1996, and Thank you very much. the list of individuals to thank is too long to accomplish here. But to all the past presidents and team members on the Board, I greatly appreciate your guidance and friendship. To those who
I
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What do you think about this issue of the International Exchange? Send your letters and comments to the editor: exchange@betagammasigma.org Dear Editor, Until I read your article in the Spring 2008 (BGS International Exchange), I have never responded to a story, report or documentary of the air travel industry. Air travel certainly is more than just a fascinating story. It is a major component to business and industry. I am a former major airline pilot that left the airline industry with nearly 20 years of service. Having worked my way up the ladder as a pilot, with 10 years of service flying exclusively the North Atlantic routes to Europe and five years training pilots in full flight simulators and airplanes, I was looking forward to what my predecessors had enjoyed - a career / vocation with a compensation / benefits / retirement program that made the airline profession what it was. For the airline pilot and employee, (the terrorist attacks of Sept. 11, 2001) changed the face of the profession. What was once a great profession is now not even a good job. Many of the aviation articles and stories today report the state of the economy and the mounting losses in the airline industry. To date, no editor-writer has entered inside a major airline to report what has been the effect on this profession from the position of the employee. Many have reported the symptoms of the industry with little or no mention as to the effect of destroying a great profession and the effect it has on the industry. With fortunate timing and opportunity I was able to leave the airline industry five years ago and embark on a totally unrelated field as a business owner / operator. In retrospect, I am able to not only be grateful for the great years of aviation that I so enjoyed but be grateful for the opportunity to reinvent myself in a new career that while it has been challenging, provides financial promise that I or my aviation colleagues would never see again in aviation for this generation and possibly more to come. I enjoyed and profited from reading your Spring For a great story that you will find no one has 2008 issue, particularly the articles on airline pursued, I encourage you to enter into the travel. It has been some time since I have read an world of the airline industry as an employeearticle from your magazine. I enjoyed the format, pilot and flesh out the details of change and content and writing. the future the industry provides as a career. I am confident that you will find no career Al Rieman profession could endure the dramatic changes (BGS 1975, U. of Nebraska-Lincoln) with the loss of pay-benefits-retirement that the airline industry has without the symptoms that are reported – In the Spring 2008 issue of the Exchange, a good deal of delays, disgruntled passengers, attention is given to the subject of ethical leadership, lost baggage, near misses, rising focusing on activities in businesses. The business experience safety issues, rising fuel prices and energies of executives, active and retired, can and do and a defunct hub-and-spoke system. contribute to socially beneficial activities outside of the world of (business) affairs. That, too, is worth some space Airline employees are more in the Exchange. than mechanized cogs in the airline system. They are living, For example, as a former CEO in retirement, I decided to breathing critical components of use my time and money to try to contribute directly to the the transportation system with prevention of mass violence. I found that in that field, the families, responsibilities and results orientation and sense of urgency commonly found in financial dreams as any employee in business can make an important contribution. It appears that a large organization would have. my business executive background is indeed having a significant effect. Chris Burkhart (BGS 1979, Arizona State U.) Milt Lauenstein (BGS 1962, U. of Chicago) bgs international exchange SUMMER 2008 www.betagammasigma.org 5
Thinking About Retirement?
E
veryone knows it must be done. Most even know that the sooner you get started, the better off you will be in the long run. But that doesn’t make it any easier to start setting aside funds for retirement. The experts are clear and to the point: If you haven’t started thinking and planning seriously to meet your retirement goals, now is the time to do it. The Retirement Confidence Survey®, a study conducted by the Employee Benefit Research Institute (EBRI), says that Americans’ confidence in their ability to afford a comfortable retirement has dropped to its lowest level in seven years. Increasing health care costs and declining home values have contributed greatly to the decline, which can be found at all age and income levels. According to a 2005 U.S. Department of Labor report, the vast majority of private sector workers in America who have retirement benefits obtain them through their jobs. This has remained constant since 1979 – the first year of the study – even though the type of retirement plan has changed. Defined benefit or traditional pension plans have declined sharply since that time, reflecting the pressure on companies to control costs. Most companies have sought to eliminate the paternal relationship they used to have with retirees. Defined contribution plans – generally known as 401k’s – have become the industry standard. In 1979, according to the study, 84 percent of private sector workers were covered by their companies’ defined benefit plan, including 62 percent who had that as their only retirement plan. In 2005, only 37 percent were covered by pensions offered through their companies, and only 10 percent were depending on that as their only source of retirement savings. By contrast, only 38 percent of these same private sector workers were contributing to a defined contribution plan in 1979. That figure had grown to 90 percent in 2005, with 63 percent of these workers saying their 401k funds were the only funds set back for retirement. Experts say that has led to more freedom for the worker to manage his retirement savings, but put more responsibility on his shoulders. “What has happened over time, as fewer people have had pensions or fixed retirement plans in place, more is dependent on their savings,” said Scott M. Draper (BGS 1996, Brigham Young U.), registered investment advisor with Pennington Financial Group. “Whatever they have saved, (are funds) being managed appropriately? Do they have a plan for how they are going to withdraw the funds, and is that a realistic plan?” With Americans living longer lives, healthcare eating up a tremendous amount of capital, inflation reducing the value of every dollar saved, the uncertainty of Social Security, and the endless roadblocks (real or imagined) that get in the way of setting money aside, we may be reaching a crisis point for the large portion of the workforce that is not saving enough for retirement. “The fact of the matter is, average Americans are far behind the curve in their retirement funding, though I imagine the BGS population is actually in front of the curve,” said Greg Carr (BGS 2001, U. of Kansas), financial advisor and associate vice president of investments with Wachovia
6 bgs international exchange SUMMER 2008 www.betagammasigma.org
Securities. “Perhaps the biggest problem I see from the field is that people simply don’t know how much they need to be saving and assume things will be okay for them as it has been for their parents’ generation.” That thinking may be short sighted at best, disastrous at worst.
“Oh geez. It can’t ever be too early to start saving.” Chris Virelli (BGS 2008, U. of Illinois), financial advisor with Morgan Stanley, who provided the quote above, said he was glad the question was asked: When should someone start saving for retirement? To illustrate, he read something off the top of his desk: If a 25-year-old started investing $75 per month, and a 35-year-old started investing $100 per month, by the time they turned 65 – at a 10 percent rate of return – the 35-year-old would have just over $226,000 and the 25-year-old would have close to $475,000. And that’s with each investing the same $36,000. “Timing is everything,” Virelli said. “I would definitely encourage young people to start saving early. I wish I did. I wish someone had told me…well, they did, I just didn’t listen to them. I wish I started investing at 15 years old. “That’s a major mistake we see. Individuals are
“The trouble with retirement is that you never get a day off.” - Abe Lemons
“Retirement has been a discovery of beauty for me. I never had the time before to notice the beauty of my grandkids, my wife, the tree outside my very own front door. And, the beauty of time itself.” - Hartman Jule
“Retirement itself is the best gift. No gold watch could ever top it.” - Abigail Charleson
“Retirement means no pressure, no stress, no heartache... unless you play golf.” - Gene Perret
now at 10 years before retirement, and granted they’re outearning any other year of their life so they can put more away, but if they had just sacrificed a little bit more in their 20s and 30s, they wouldn’t be in such a tough position.” The financial demands for young professionals can be challenging. There may be student loans to pay off, an apartment or first mortgage payment, a new car, credit cards and potentially a spouse and young children to support. It can be tough to find that extra little bit to set aside, but the experts say the key to building retirement wealth is to start early. “I think a lot of people, when they are just getting started earning some money, say, ‘I’ve got a home and a car and a family that I need to take care of, and I’ll just worry about retirement later,” Draper said. “What often happens is there is always another pressing need. If you keep putting (retirement savings) low on the list it never quite gets there. “When you look from a numerical perspective, and you run the numbers, by putting away a little bit when you’re younger, it often has a greater impact than putting away a lot when you’re older. I would recommend that when someone graduates from college and gets a job, even if it’s a matter of just putting away $500 or $1,000 a year, if you can squeeze that out the first few years it’s going to grow to be more than you realize in the long run. “When you put it off, you’re sacrificing the time element, that even if you have more money to put in later you don’t have the time for that money to grow.” Carr said procrastination from the beginning of one’s professional career often leads to a downward spiral.
“That’s usually when young people get out of college and they’re blowing money on new cars, partying, and whatever else. Then they get married and they realize, ‘Man, these diapers are expensive. My kids want iPods, they want Wiis, I want to give my kids what they need and want in life.’ And college is unbelievable. So then, you don’t have any money to sock away until you are an empty nester. “You neglected putting away the money when you were young, you had difficulty putting away money in your middle life, and now you’re 50 or 55 and you’ve only got a window of 10 to 15 years to sock away everything you need for your retirement. Then you don’t have time for the compounding effect. “Procrastination is huge.”
How much is enough?
When business professionals in America enter their “promotion” years – 35 to 50 – they earn a considerably higher income than their younger peers. However, additional living expenses generated by family obligations often offset this increase. Homes, cars, vacations, Little League, PTA – these all join forces to work against the professional who hasn’t focused on a retirement savings plan. “I think Americans are behind on funding for various reasons,” said Virelli. He said we don’t save enough, even for what we think we are going to need. In addition, inflation can be difficult to calculate, “and I don’t believe Americans understand the position they are going to be in later in retirement,” he said. Virelli said the increase in life expectancy is both a blessing and a curse when it comes to retirement. He cited statistics that say if you make it to 65, your chances of living “Retirement at 65 is ridiculous. When I until 90-years-old are 50-50. “And if you live to 70, your was 65 I still had pimples.” chances of making it to 95 are strong. So we’re talking about - George Burns potentially a 30-year time frame, and over 30 years inflation can affect the power of your dollar and it can reduce it threeand four-fold.” Retired is being twice tired, As there are few companies offering fixed pensions these I've thought days, so too is it rare to find the individual who works with First tired of working, the same company her entire career. So what should she do Then tired of not. when she finds herself switching jobs? What’s the smart thing - Richard Armour to do with 401k and other retirement assets? Draper said it’s best not to take an early distribution from a retirement plan unless the situation is critical. He said you “Retirement kills more people than can get hit with pretty stiff tax penalties, and there will be a hard work ever did.” significant setback in accumulating assets for retirement. - Malcolm Forbes His suggestion is to roll over 401k funds from a previous employer into an IRA. He said the tax advantages are the same between the new company’s 401k plan and an IRA, but “The best time to start thinking about your the IRA is much more flexible. “Every employer runs their plan a little bit differently,” retirement is before the boss does.” Draper said. “They’re getting better, but a lot of the plans have - Author Unknown fewer options than what an IRA will allow. An IRA is pretty much unlimited in how you can manage the money inside it. By rolling that money over from a 401k to an IRA you can either manage that money yourself…or you can have a professional manage it.” He contrasted that with a new employer’s 401k plan, which would give fewer options. “Some of those plans are managed well and offer good investment choices, and some are very restrictive and the Continued on Next Page bgs international exchange SUMMER 2008 www.betagammasigma.org 7
Thinking About Retirement?
(Continued from Page 5)
choices aren’t very good,” he said. “It’s really a matter of flexibility and freedom in choosing how to manage your money going forward.” Experts say it’s an inexact science trying to figure out how much wealth is needed to live comfortably in retirement. They say each person is different, and ideas of “enough” run the gamut. Using the Consumer Price Index to judge inflation, trying to gauge the future cost of health care, considering spending habits, working through the desires of individuals to “make a difference” in the community and through charitable organizations are all part of the job of a financial planner. Many in the industry use a general industry rule of thumb that says a person needs 75 percent of his last year’s income at retirement each year. As an example, a person making $100,000 at retirement would need $75,000 per year when he retires. But as a result of inflation, he may need $300,000 per year after 30 years.
“Retirement appears to be a carrot on a stick, where the stick just keeps getting longer.” There are some business professionals who feel that the word “retirement” today has a bait-and-switch feel to it. They were promised something long ago, but that promise is gone, replaced by an uncertain future. “I think the concept of retirement is going to become more elusive for more people over time,” said Robert H. Campbell (BGS 1970, Northwestern U.), chief operating officer and turnaround specialist for several companies. “That’s because retirement requires an element of confidence.” He said people must be confident that they will have sufficient money to live out the remainder of their lives, no matter how long that might be. Financial planning experts agree that the model has changed. “Retirement might best be defined today as getting to the point where your assets allow you to not work in any way that isn’t of your own choosing,” said Draper. “It’s really about freedom and using financial assets to achieve one’s own definition of that freedom.” Campbell says it all comes down to whether you can really decide for yourself. “The word ‘retirement’ is a good noun when someone has a choice,” he said. “That choice is, ‘I can either retire or I can work.’ I think it’s a bad noun when retirement becomes out of the reach of people who would prefer or choose it, or in some cases they physically must retire. “When I walk into a Home Depot and I’m being waited on or greeted by someone clearly in their 70s; when I go to McDonald’s and I’m handed a bag of fries by somebody that’s clearly on Medicare; when I go into a 7-Eleven and the person behind the counter is definitely a member of the AARP, that’s different than when I was growing up.” Campbell said the erosion of the pension model, where employees worked their entire careers at one company, retired, and lived off the company pension, has diminished the element of confidence needed for workers to feel good about their retirement years. “When you look at my career,” he said, “which has been 25 years of commercial banking, and then being in senior management in seven other industries, even though I’ve 8 bgs international exchange SUMMER 2008 www.betagammasigma.org
maintained 401k’s I’m still faced with the same factor: Can I continue my employment long enough to make enough money to retire comfortably?” Some may dismiss him as a pessimist or out of touch, but more troubling than one member’s pessimism is Campbell’s belief that his views are typical of his peer group. “In my circle of executives here in San Diego, when I sit down with them one-on-one, we concur that the future is very difficult to plan for. There used to be a time when people had a greater comfort level of stopping the income stream and feeling like they could slide for home safely. “And I have the feeling now…that although we are ‘rounding third and heading for home,’ there is no slide anymore. We’re going to have to run like hell to cross the plate. “Retirement appears to be a carrot on a stick, where the stick just keeps getting longer,” Campbell said.
Boomers Beware: Waiting to save could result in tough medicine. The experts were unanimous in saying it’s never too early to start saving. The flip side, of course, is they agree that the longer you wait to save, the less you will benefit when it’s time to retire. But if you haven’t started yet, it’s not too late. If you make a plan and follow through you can still make a huge difference in your wealth position for later in life. According to the EBRI, the likelihood of participating in a retirement plan of some kind increases with age. Just over 60 percent of all full-time, full-year wage and salary workers ages 54 to 64 participated in some kind of retirement plan in 2006. For those ages 21 to 29, fewer than 30 percent were enrolled in some kind of plan. These numbers indicate that as workers get older, they realize they must do something to prepare for retirement. While they may not have time – and the value of compounding interest – on their sides, they will still benefit from collecting as much savings as possible. “The average person starts…waking up about five to 10 years before retirement,” said Carr. “Typically that empty-nest time, they finally realize, ‘Hey, retirement is looming and I’ve got to do something.” Draper said boomers must realize time is short to make a difference. “Really, it comes down to living within your means,” he said. “So if you’ve never done that, and you get to the point where you want to be more stable financially, living on less in your 60s versus up until that point isn’t going to hurt. It’s going to help your situation.” Some numbers for the overall population are downright grim. More than 20 percent of the U.S. workforce and 28 percent of retirees report no savings of any kind, according to the EBRI. Almost 50 percent say they have accumulated less than $50,000 in savings. When this is a baby boomer looking at retirement in the next decade or so, it can be daunting. “Sometimes it just comes down to delivering tough medicine,” Virelli said. “That boomer who is 10 years away from retiring, and it doesn’t look like that individual is on pace, we need to take a look at all their income and expenses to see what we can come up with. “If we can cut something out, or if we can sell an asset and invest it – you’d be surprised how many boomers haven’t saved enough for retirement but they have two homes. We
“When I go into a 7-Eleven and the person behind the counter is definitely a member of the AARP, that’s different than when I was growing up.” Robert H. Campbell Chief Operating Officer and Turnaround Specialist
may choose to lock in some growth and annuitize a portion of their portfolio – 10 years before retirement is a real nice time to buy an annuity, maybe with 25- to 33-percent of their portfolio. “We can take a look at trimming expenses, max out their 401k’s, liquidate assets or toys or superfluous assets, and lock in some gains with an annuity.”
Peace of Mind All the experts agreed that it comes down to creating a good retirement plan and sticking to it. That can mean different things for different people, but it’s important to be honest about your goals and your ability to meet them. “The best thing to do is get a realistic picture of where you are and where you want to go,” Draper said. “If you have the skills to do that on your own, sit down and assess all your assets and how they are going to be managed and what you will be able to withdraw. “If you don’t feel you have those skills, sit down with a professional, preferably a certified financial planner, and put together a realistic retirement plan. Start with where you are today, what your commitments are going forward, and what
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type of income you want those retirement assets to provide.” When should an individual sit down with a professional to plan for their retirement? Draper repeated a familiar theme: “I would lean toward earlier than later. If you look at putting together a good financial plan, and if you actually implement it and stick to it, it can pay for itself 100 times over down the road. “The biggest thing it will give you is peace of mind; you can actually enjoy your retirement. There’s a lot of stress and pressure that you’ve dealt with in your career, and you may say, ‘Okay, I’m at a point that I don’t need to worry about that.” Well you can get rid of your job, but then if you’re worrying all the time that you’re going to run out of money you’re just taking on a new type of stress. “By having a realistic plan – you’ve run the various scenarios…and looked at all the different possibilities – and the plan is viable, you’re going to have a lot more peace of mind to be able to enjoy your retirement versus worrying about where your money is going.” Carr provided one more ominous message: “If we don’t plan well for retirement, we better be nice to our kids. We may be living with them someday.”
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Social Security: A Basic Human, Economic Contract?
Experts see the future of Social Security differently, but the ones who spoke to the BGS International Exchange on the subject tended to agree with Pritchard. “Most people are very negative about Social Security. In fact, I think people are a little too negative,” said Greg Carr (BGS 2001, U. of Kansas), financial advisor and associate vice president of investments with Wachovia Securities. “I would say the majority of my clients who are under 40 say, ‘I don’t even want to factor in Social Security. If I get it, it’s gravy.’ “There’s nothing wrong with doing that, because it forces you to put away more money. And I don’t know too many people who are putting away too much.” Carr said that for his own financial plan he assumes he will receive 50 percent of what his Social Security statement
If you want to start a heated argument, just pull a crosssection of the population into a room and start discussing the future of Social Security. Smart people say religion and politics should never be discussed in social situations. The really intelligent among us would probably add Social Security to that list. The Social Security “lock box.” Dissolving the system and replacing it with a stock market-based plan. Increasing taxes on workers. Decreasing benefits to the wealthy. These – and many, many more – have been on the table and discussed for years. But the fact remains there are many Americans “Most people are very negative about Social who depend on Social Security to get them through Security. In fact, I think people are a little too their later years. With the negative...the majority of my clients who are latest estimates saying Social Security will be insolvent by under 40 say, ‘I don’t even want to factor in Social 2041, it’s a problem that isn’t Security. If I get it, it’s gravy.’” going away. Greg Carr Robert E. Pritchard Financial Advisor and Associate Vice President of Investments, Wachovia Securities (BGS 2003, Rowan U.), professor of finance at the Rohrer College of Business at Rowan University, said Social Security must be saved in tells him. He also advises his clients to adopt the same some form. He said there is a basic human, economic contract formula for their plans. He cautions that something must in all civilized societies that says those who work will take change because the system is not sustainable as it is. The care of those who don’t. This group consists of children, government can’t let the program fail completely, because it homemakers, the disabled, the elderly, the imprisoned and would leave too many citizens with little or nothing in their others, and he contends that the mass media’s reporting of the later years. demise of Social Security is premature. Pritchard is concerned that supporting boomers who “Social Security is here to stay,” he said. “The media haven’t planned well could financially cripple some of their tends to over hype everything. Fear sells. But I do think Social children. Security is going to become much more of a true safety net “Looking ahead to the rapidly approaching day when over time. I doubt that those currently receiving benefits will boomers start to retire en masse, there is going to be a be phased out, but it will be a different program. tremendous burden placed on the younger generation
Helpful Hints for Planning Your Retirement Some Tips • • • • • •
•
Speak with a financial advisor you can trust. Establish a periodic investment program – an automatic withdrawal program where you invest a certain amount every month. Start as early as possible. Even if it’s only a little at a time, it will add up. Take full advantage of your 401k. Take advantage of a Roth IRA, if you can. Listen to your financial advisor when he or she says you can live in retirement for 30 years and your earning power could be cut down to 25 percent of what it is when you retire. Invest in equities and higher-returning investments all the way until approximately 10 years before retirement. That 10-year date is a good time to start thinking about re-allocating your portfolio; maybe give up some return to reduce risk.
Source: BGS Members Working as Financial Planning Experts 10 bgs international exchange SUMMER 2008 www.betagammasigma.org
How do you select a financial advisor you can trust? • • • • • •
•
Interview several candidates from different firms. Ask yourself, “Does it feel right?” When you sit across the table from the advisor, do you feel good about him or her? Compare fees and services. Every firm is different, and you want one that fits your needs. Look for evidence of competence by checking credentials (MBA, CFP, etc.) If someone asks you to transfer assets within the first or second meeting, that should be a red flag. If someone is pushing their products – giving a commercial about themselves or their firm – before they have worked to know everything about you, that is a red flag.
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under current law,” he said. “We’re approaching an intergenerational crisis where Society has to figure out, ‘What is the appropriate allocation of goods and services for those in the working world and those who are not?’” He said these are tough questions – especially with politicians reluctant to alienate important voting blocs – but they must be answered. “We’re going to have to see some major changes to the Social Security laws,” Pritchard said. “I would see two or three major changes that will have to take place.” • Currently, only the first $100,000 in income is taxed (as insurance premiums) for Social Security. In the future, he sees both employers and employees being taxed for the total amount of income. For example, if someone makes $500,000, currently she would only be taxed on the first $100,000 of her income. Under potential new laws, she and her employer would both be taxed for Social Security on the entire $500,000. • Social Security benefits would “phase out” as individuals reach higher income levels. As people have higher retirement incomes, their Social Security benefits would be reduced on a sliding scale. So someone with income under $100,000 may receive full benefits, while someone with income of $200,000 or more may receive none. Those in between would receive partial benefits. • A combination of the two ideas. “I think those two issues are very, very likely to take place,” Pritchard said. “One can argue that they shouldn’t, because technically Social Security is insurance, and once you’ve paid your insurance premiums you should get your benefits.” But he said without these changes there would be no money available for the safety net. Pritchard said much of the controversy surrounding Social Security is a matter of semantics. The issue has been a political “hot potato” for so long that all sides seem more interested in protecting political turf than finding solutions. The truth, he said, is it really doesn’t matter whether older people are supported by pensions, Social Security, interest payments, dividends, capital gains or anything else. In all these scenarios, those who work are supporting those who do not. Again, that gets back to Pritchard’s original contention that this is a given in a civilized society. “There’s no way to get around that,” he said. So, in his classes, what do today’s students think about retirement? He said most understand they will be working much longer than those retiring today; at least until the age of 75. “The idea of retiring at 65? That was set in motion when very few people lived to 65. If you lived that long, you know, you deserved to retire,” he said, laughing. “But barring the establishment of a euthanasia program, where you eliminate people when they reach a certain age – which of course, would be highly politically and morally unpopular – young people today are going to have to work much longer. Their ongoing productivity is going to be needed.”
1/24/08
865-974-5033 E-mail: mba@utk.edu • mba.utk.edu bgs international exchange SUMMER 2008 www.betagammasigma.org 11
Women and Retirement To be secure in retirement, women need to do more thinking ahead than men. The good news for women is they live longer, so they will have longer to enjoy their retirement. The bad news is they live longer, and so their retirement will be much more expensive than for their male counterparts. “It is not unusual for a woman to live into her 80’s, which means if she retires in her 60’s she could be spending as much as 20 or 30 years in retirement,” explained Candace Bahr, certified estate advisor, certified divorce financial analyst and co-founder of both the Bahr Investment Group and the Women’s Institute for Financial Education. “That nest egg has to be very substantial.” According to data from the U.S. Department of Health and Human Services, women have an average life expectancy of 80.4 years, 5.2 years more than men. Compounding the issue is the fact that most women marry older men who die at younger ages. According to a 2005 report from the U.S. Census Bureau, women are three times more likely than men to be widowed, and at age 85, 78.3 percent have lost their spouse. The combination of being on their own and living longer means that women need far more retirement income than most men. Unfortunately, women’s pension plans just don’t measure up. The U.S. Department of Labor reports that only 28.5 percent of all women aged 65 and older received a pension and those who do typically receive only 54 percent as much private pension income as men. The reason for this lapse is a simple
one. The pension you receive depends on whether you stay on the job. “The hard part for women is that because they are typically the caretakers of the family, they usually have a period of time when they are out of the workforce and not putting money into a retirement plan,” said Bahr. “As a result, they often do not have as much money in their retirement plans, which is the exact opposite of what the case should be.” The average woman will spend 12 years away from her career, caregiving for children and parents, according to the U.S. Census Bureau. The fastest growing segment of the population is those 85 and older, and many midlife women today find themselves part of a “sandwich” generation, caring for children, parents and grandparents. “Women, especially single moms, will often take lower paying jobs by choice because it provides them with more flexibility to move in and out of the workforce,” said Bahr. “As a result, women tend to earn less. It’s not so much that women are in the same jobs as men, but often women take jobs that are not as high paying, so they simply do not have the income, so they are not putting away as much money.” How much less are women earning? The U.S. Department of Labor reports that as of the first quarter of 2008, women averaged $153 less per week in earnings than their male
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September 15-28, 2008 12 bgs international exchange SUMMER 2008 www.betagammasigma.org
“A single mother in the workforce is often times barely making ends meet...That makes it difficult to save for retirement.”
Candace Bahr Certified Estate Advisor, Certified Divorce Financial Analyst Co-founder of the Bahr Investment Group and Co-founder of the Women’s Institute for Financial Education
counterparts. That’s almost $8,000 less per year. “A single mother in the workforce is often times barely making ends meet,” said Bahr. “That makes it difficult to save for retirement.” Further complicating the matter, many companies require employees to work for five years before being eligible to receive retirement benefits. Because women change jobs every 3.5 years on average, many fall short of the vesting minimums. A 2005 study by the National Organization for Women reported that 61 percent of working women have no pension plans, while 76 percent of retired women receive no pension benefits. Also at issue are major life transitions, in particular death and divorce. Bahr, a financial planner who for the last 28 years has worked primarily with women going through these kinds of life transitions, emphasizes the importance of retirement planning for women. In the case of death, Bahr suggests that women not rely on their husband’s pensions. “His wife will probably get only 50 percent survivor benefits, which won’t come close to providing her the income she needs to carry on her lifestyle. “If the husband was the one primarily making the investment decisions, now you have lost your husband, you have to make a decision about how to manage money, and you
are in the process of grieving at the same time,” she said. “So as a woman, it is critically important to be involved in all the financial decisions, not just the savings decisions and spending decisions, but also the investment decisions from day one.” While no woman gets married with the intent of getting divorced, Bahr suggests that it is a reality that women should keep in mind. “Even if you have been a careful saver your entire life, you will now have to divide your assets in half, and if you were married and your husband was the primary breadwinner… you will probably be living at a substantially lower income, which will make it more difficult to save,” Bahr said. “Frankly, divorce is a far more devastating factor in losing retirement assets than probably anything else.” Whether you are married or not, here are a few suggestions from Bahr and the Women’s Institute for Financial Education: Make retirement plans a priority when you consider a job Consider sacrificing some current salary in return for a good retirement plan, and seek out employers who will match part or all of your savings in a contributory plan. Work as long as you can at the highest salary you can The longer you work, the more you can sock away for retirement. And the older you are when you retire, the fewer years of retirement you will have to fund. Higher Social Security benefits are an extra bonus for those years of hard work. If you pay into Social Security for at least 10 years (or if you qualify for Social Security under your husband’s work record), you won’t have to pay monthly premiums for Medicare hospital insurance when you retire. Understand the effect on Social Security benefits of divorce and remarriage If you divorce, you are entitled to Social Security payments equal to 50 percent of your ex-husband’s benefits, if you were married for at least 10 years. You’ll lose that right if you remarry, though you’ll be entitled to collect payments based on your new husband’s benefits. A widow is entitled to her late husband’s benefits as long as she doesn’t remarry before age 60. Just $10 to $20 a week can add up, especially if you start young. For example, $20 a week invested in growth mutual funds from age 40 to age 65 will build to a nest egg of $92,000. Start at age 25, and it will grow to nearly $370,000. Learn about your finances Don’t just sign tax returns, be sure you understand them. Get assistance from your tax preparer if you need explanations. Identify your financial assets and debts, and begin to save for your future by paying down debt and budgeting. If you are married, be sure that you and your husband each understand what you own and what you owe, and use insurance to plan for the possibility of death or disability.
bgs international exchange SUMMER 2008 www.betagammasigma.org 13
Lifetime Member Opinions and Behaviors Regarding Retirement This May, Beta Gamma Sigma asked its members a series of questions by email about The State of Retirement. Nearly 4,000 responded to the survey, which provided a great deal of insight as we put together the articles for this issue of the BGS International Exchange. Beta Gamma Sigma thanks all those who responded to the survey, and presents some information below about your fellow members and the workforce in general. The current state of the U.S. economy has hit Americans in many ways. The value of the dollar versus other currencies continues to drop, contributing to the spiraling price of oil and gasoline. One analyst described the sub-prime housing crisis and the resulting credit crunch as “combining to form the worst economic crisis facing the United States since the Great Depression” while another has begun calling this period “The Great Recession.” Food prices have climbed rapidly worldwide, thanks mostly to the cost of fuel. Etc., etc., etc. So, how does all this challenging news affect members’ perceptions of their retirement readiness? How comfortable are BGS members when compared against all American workers? Almost 40 percent of BGS members said the current state of the economy has caused them to change the way they are thinking and planning for their retirements. For those ages 51-65, more than 43 percent say their thinking has changed. Greg Carr, financial advisor and associate vice president of investments for Wachovia Securities, said historically a dip in the economy results in more people paying attention. “Yeah, it always does,” he said. While pointing out that the U.S. is not technically in a recession yet, he said, “We typically have recessions every four to five years, and this is nothing abnormal.” To stress that point, he read from a postcard he had sitting on his desk:
“For gasoline, little is certain but high prices. Interest rate fears weigh down stock. U.S. dollar declines. Companies go abroad and jobs go along.” Carr said these are headlines from the newspaper in 1974. To measure confidence, BGS asked its members, “How comfortable are you that your current plans regarding retirement will allow you to live your desired lifestyle? Exactly 50 percent responded “very comfortable” (15 percent) or “somewhat comfortable,” which also meant 50 percent were not very comfortable. The overall population was a bit more optimistic, according to the 2008 Retirement Confidence Survey. Sixty-one percent were very (18 percent) or somewhat confident. Chris Virelli, financial advisor at Morgan Stanley, said it’s a sign that BGS members are bright individuals that they have concerns. “I see that as their heightened awareness of what it’s going to take in retirement,” he said. “I think it’s good that they recognize it. “I’m in the industry, and I constantly think about it and consider how much I’m going to need to retire. I think that’s what makes us uncomfortable, the uncertainty.” BGS members and the general working public split sharply in the number of those participating in some kind of retirement plan. Just more than 52 percent of all American workers participate in some kind of plan, according to the Employee Benefit Research Institute (EBRI), while 83 percent of BGS members said they participated in a 401k, Roth IRA or other plan. Finally, there was a significant difference for BGS members between “What age do you plan to retire?” and “Finances aside, what would be your ideal age for retirement?” More than 50 percent responded that their ideal would be to retire at 59 or less, but only 18 percent thought they would actually retire by How comfortable are BGS Members that time. that their current plans regarding On the other hand, fewer than a quarter (23 percent) of retirement will allow them to live BGS members responded that 65 years old or above or “Never” their desired lifestyle? was their ideal time for retirement, while 50 percent thought that was the reality they faced. Among the general population, 62 Very Uncomfortable (6%) percent expected to retire at age 65 or above or “Never” according to the EBRI Has the current state of the research. This group was not asked Very economy changed the way BGS about their ideal age for retirement, so Comfortable Members think about and no comparison could be made. Somewhat Uncomfortable (13%)
Neutral (31%)
(15%)
plan for retirement?
Additional responses to this survey are now viewable on BetaNet.
Somewhat Comfortable (35%)
Yes (39%) No (61%)
14 bgs international exchange SUMMER 2008 www.betagammasigma.org
Find out what other BGS Lifetime Members are saying about this topic:
www.betagammasigma.org/ retirementsurvey.htm
“The entrepreneur really needs to have a good personal operating system because you have nothing else. You have no money. You have no office. You have no help. You have no staff. You have no customer. All you have is you. If people can’t trust you, you are dead.” Chung Po-yang (Po Chung) Co-Founder and Chairman Emeritus, DHL International Ltd. 2008 Beta Gamma Sigma International Honoree
The Anatomy of Trust
Photo Courtesy AACSB International
Standing before a crowd of business school representatives, Chung Po-yang (Po Chung), Co-Founder and Chairman Emeritus of DHL International Ltd., delivered a unique lesson on the importance of trust in business. Chung, the 2008 Beta Gamma Sigma International Honoree, challenged those in attendance to change the paradigm by which individuals are measured as leaders. Drawing from lessons handed down by some of the world’s greatest and most iconic thinkers, including his grandmother, Chung provided a modern examination of leadership. Using lingo from the IT realm, Chung described what he termed the “anatomy of trust.” The following is a portion of that address:
L
adies and gentlemen, it is a great honor to be speaking to such a distinguished assembly. When I was told that I would be receiving this honor, and would be talking to you, I said “Great, this is just an even better collection of things I can tell my great-grandchildren.” But it was not until I sat down to figure out what I should say to you that the question popped up – “What can I tell business school professors about management that they don’t already know?” So, I said to myself, “Maybe, just maybe, we can talk about moving from ‘What can our graduates do?’, towards ‘Who should our graduates be?’” People hire us for what we can do. People respect us for who we are. People trust us and follow us only when they know that we will not hurt them. Some people say that leaders are people who are people who can lead. I say leaders are people with followers. Therefore we pick the kinds of people we are willing to follow. Then we pick the kind of people others are willing to follow. Then we pick the kind of people we are willing to be partners with. Let me use the metaphor of computers, operating systems, local area networks and network viruses. If you can imagine yourself as a bio-computer, your community is the local area network and your brain is your CPU. You use it to collect data, process information, analyze situations and make decisions. You have many application programs. Applications are the things you can do. Applications are the things we teach our MBAs to do. These are communication skills, problem solving skills, analytical skills, path finding skills, everyday skills and leadership skills. All of these are very important, and that is why all of the business schools are doing thriving business. However, when all of these applications or programs are running, we also have an operating system running inside us, under these application programs. So we have what I call the personal operating system, or who you are. Your personal operating system is your beliefs, your values,
your behavior, your likes, your dislikes, your integrity and your character. The bottom line is: can people trust you? The entrepreneur really needs to have a good personal operating system because you have nothing else. You have no money. You have no office. You have no help. You have no staff. You have no customer. All you have is you. If people can’t trust you, you are dead. I think most of us will agree, that you trust people only if you know that they will not hurt you. So, what are you afraid of? You are afraid of people who are unkind to you. You are afraid of people who are unfair to you. You are afraid of people who are rude to you. People who do stupid things to you, and get you in trouble. People who lie to you. People who betray you. People who abandon you in the face of danger. People who acted corruptly and get you in trouble. People who act unashamedly with you. People who are unkind to the elderly. People who are unkind to the young. People who are unwilling to correct mistakes. People who hold a grudge against you for months. Those are the things my grandmother taught me. Virtues may not be universal, but viruses are. So scan for viruses before making commitments in hiring, but particularly in promoting because that is where your future leaders are, and you don’t want leaders who dump viruses into your LANs when you promote them. You pick partners, business partners and marriage partners according to this. I know for some of you, it may be too late. We need to be aware about how to attract followers with our ethics, our integrity and trust. Or at the very least, we need to not repel them with our viruses…don’t dump viruses into your network. To be a leader you cannot afford to lose followers. Virtues are nice to have, but viruses you cannot afford. As I said earlier, maybe, just maybe we can move away from what our graduates can do to who our graduates should be. Managers who are brilliant and capable but without a soul will only get the world in double-trouble.
bgs international exchange SUMMER 2008 www.betagammasigma.org 15
Over the last 40-plus years, Chick-fil-A has set out to “Be America’s best quick-service restaurant.” As the Atlanta-based restaurant chain has strived to live up to that goal, it has earned some of the most prestigious awards and recognitions in the quick-service industry, and has enjoyed 40 years of consecutive annual sales increases, including the last 14 with double-digit growth. A family business, currently in its second generation of leadership, Chick-fil-A has further distinguished itself by establishing and maintaining a sense of family and community at all levels of operation. In February 2008, Robert D. Reid, Dean of James Madison University’s College of Business, sat down with Dan T. Cathy, President and COO of Chick-fil-A, and discussed the company’s unique approach to corporate culture. The following are excerpts from that conversation.
Robert D. Reid: Chick-fil-A has an exceptional corporate culture. Could you tell me a little bit about how it was built and, more importantly, how you sustain it? Dan T. Cathy: Nurturing our company’s culture is probably the most important role that I have. Our family got in the restaurant business in 1946 when my dad sold a car that he had and built the first building. It had 10 stools at the counter, a cigarette machine on one end and a juke box on the other. I had a student ask me recently, “What’s a juke box?” I told them it’s an MP3 player on steroids. But that little place of business was really unique. It was a lot like Cheers, the Boston tavern where everybody is somebody and everyone feels very welcome. They celebrate together, they mourn together at times, and they kind of share life with each other. Dad had this going on with the employees behind the counter…so you kind of got to know the employees. They were like surrogate aunts and uncles for myself and my younger brother Bubba. That was our daycare center. I think the Chick-fil-A culture of today is really an extension of that. Where we try to be real and genuine and personal with one another and encourage each other. As a result this genuine warmth and family atmosphere extends out even to the customers and they can sense that when they come into one of our restaurants. RDR: How do you screen and hire people so that you are finding the right employees who are truly going to contribute to your culture? DTC: You have to be very, very careful because that is the most important decision that we make. It’s not location, location, location. While that is important, for us it is more about people, people, people and making a good selection. We typically select based on what we call the “three C’s.” Competence, that’s their business acumen and the skills that they have. Character, which is their whole values set, and also their Chemistry, their likability – is this someone we would want our own sons or daughters to work for? RDR: As you look at those three C’s, what processes do you use to assess those? How do you determine whether someone is going to be a fit for the organization? DTC: Most often today, I refer people to our internet site, chickfil-a.com, because more and more of the kind of questions we are typically asked are answered on that website…in fact, individuals can actually fill out an online application. It is a 16 bgs international exchange SUMMER 2008 www.betagammasigma.org
very abbreviated application that gives us an opportunity to filter whether or not this is a person we would like to continue to see moving forward in the process. Eventually, they will have to fill out the full application, and if you thought a college scholarship application was thorough, just wait until you see the Chick-fil-A application. It takes a lot of time to fill that out, but it is very comprehensive. Someone has said that it is easier getting a job with the CIA than it is with CFA, and we try to live up to that reputation. RDR: A lot of organizations are trying to instill ethical behavior in all their employees. Once someone is on board, what are the kinds of training and activities—the things that are ongoing or sustainable—that help you maintain an ethical business culture? DTC: Obviously it starts with the selection of people. I think that is probably 90 percent of it or more right there. You select people who already have a history of successful relationships… and I think that the kinds of activities and relationships that they have had over a sustained period of time really gives you an indication of what their performance is going to be. When we deal in a positive relationship with each other it creates an atmosphere where we can be at our very best. We can be creative, we can be spontaneous, we can be planful, yet at the same time we can take advantage of unexpected opportunities. I think the genesis of that however, the genesis of the relationship I can have with other people, is because of the relationship we have with our Heavenly Father. RDR: Let me follow up on that. We live in an age of political correctness and separation of church and state and prayer in schools, and yet faith is a major part of your culture and what you do. How do you sustain that? DTC: Hopefully we live it out. I think it is certainly more than just putting symbols on the wall or printing scripture verses on cups and other things. When you walk through here you really won’t see hardly any religious symbols and such, but what you will see is people who will be opening their door for you. You will see people that greet you in the hallway and have a
“It’s
not location, location, location. While that is important, for us it is more about people, people, people and making a good selection.” Dan T. Cathy President and COO, Chick-fil-A Restaurants
pleasant smile. You will see people who will help you bring some bags in. And you will see all those things. RDR: As the organization is expanding and going into new states, it takes a lot of partners to do that. How do you assess the relationships you have with your vendors and establish the kind of relationship that you want with a vending company? DTC: The relationships we have with our vendors is vital…if we don’t have nice fresh lemons coming in the back door there is nothing we can do in that kitchen. . Once products come in they have to be the quality we expect and demand. I have our suppliers often come participate in the same orientation program that I do for all our new staff and operators. I spend a full day with all of our new staff and operators. It’s a program we call “Vision and Values.” We start at 7 in the morning and finish around 2:30-3 in the afternoon. I then get a bunch of groceries together and I have all these folks over to my house for dinner. And I’m pouring all the tea, and fixing all the food, and doing all the raspberry vinaigrette salad dressing by hand. But they go through all that and they kind of see what our organization is all about, and our consciousness, and how we really are restauranteurs. We are not just accountants and financiers, but we are restauranteurs with a great deal of pride in our product. They get in step with that...and we then sustain that relationship over a long period of time. RDR: Are there advantages or things that you can think of that you have been able to do as a privately held company versus a publicly traded company where maybe there is more emphasis on the quarterly results or earnings projections? DTC: Probably the most visible sign of that is the reputation we have for being closed on Sunday. That is a big, big marquee for us. And to be honest with you, that whole statement of being closed on Sunday is a literal statement but it also has some figurative overtones as well. It is probably the most succinct way of talking about our corporate culture. This is a policy that we have had for 62 years since Dad opened his first restaurant and I have very much bought into it, as have my siblings. So that is expected to go on for another whole generation. We signed a commitment to our parents that we were going to keep that. But I think it also speaks to the care of people behind the counter. If we take care of our team members and operators behind the counter, then they are going to do a better job on Monday. In fact I say our food tastes better on Monday because we are closed on Sunday. And I really do believe that is the case. RDR: If an employee is either struggling with an ethical dilemma of their own, or they are observing something that they are uncomfortable with, what kinds of processes and procedures can they tap into to resolve that? DTC: At the restaurant level, we select really great people as Chick-fil-A operators who are really strong business leaders, and they have been screened and selected on the whole issue of ethics and moral standards. Most of the situations that we might see out there would be involving an hourly team member who may have
an issue they are going through in life, a personal struggle that they might be dealing with. The fact is, all of us have personal struggles that we are dealing with. In my opinion, anyone north of six-feet-under has personal struggles and issues they are going through. I’ll never forget as a teenager climbing up on the roof of our family restaurant and seeing a bunch of beer cans up there. Dad knew that Charlie, the night manager, was responsible for all those black label beer cans being heaved up there. And I thought, “daggumit, Charlie why did you do that?” I knew him my entire life, and I knew he was going to be fired, and I hated it for him, and I hated it for my Dad. But boy was I surprised when Dad sat down with Charlie, and I got a little report that night when Dad got home. My Dad told me that he wanted to see if he could work it out with Charlie. He said that Charlie had a problem and needed some help to deal with it. And I am still amazed at the compassion that my Dad had towards Charlie. He ended up retiring from Chick-fil-A. RDR: How does Chick-fil-A build Ethical Business Leadership into its evaluation and reward structure? DTC: Everybody needs encouragement. In fact, if you are wondering if somebody needs encouragement, check to see if they are breathing. Anytime we can recognize great performance it not only encourages that person, but also other people who are in need of recognition and encouragement begin to model those values and behaviors. People repeat behavior that is rewarded and recognized. As leaders we have to make sure we are recognizing behaviors we want to see perpetuated throughout the organization. RDR: Do you see a difference between ethical behavior in the business world and one’s personal life, or are they synonymous? DTC: The most important decisions that we make are really how we spend our personal time. Our public life is really a reflection of our private life. With as open of a society as we have today— with the accessibility of information as it is—there is very little room, if any at all, to be so foolish as to believe there are going to be some things that we can keep in the closet that will not ultimately see the light of day. Certainly our governmental leaders have learned that. Business leaders have learned that as well. If you make a bad mistake about how you spend the shareholders money or if you misrepresent the values that you have espoused—if you say one thing but your personal conduct goes another—that ultimately will bring shame and disrepute to the organization, as it should. But the tragedy is that a lot of other people have to pay the consequences for the personal decisions that we make. On the other hand, people also get to enjoy the benefits of good decisions and right choices that leaders make and that is a great thing as well.
bgs international exchange SUMMER 2008 www.betagammasigma.org 17
Gifts from Friends
GENEROUS DONORS SUPPORTING BETA GAMMA SIGMA January 16, 2008 - April 15, 2008
Beta Gamma Sigma gratefully acknowledges the support of the following individuals, as well as the organizations listed on page one. Without this assistance, the Society would be unable to continue adding value to the lifetime membership. Directors’ Table $1,000 - $1,999 Instituto Tecnológico Autónomo de México Carlos A. Monroy Jacksonville State University Carl W. Gooding President’s Cabinet $500 - $999 University of Alabama Marinda J. C. Wood University at Buffalo, State University of New York Paul F. Eckel Deans’ Club $250- $499 University of Hawaii Arlene Cabalce-Yamakawa University of Massachusetts George P. Shea University of Notre Dame Jeffrey W. Yingling Century Club
$100 - $249 Baruch College – The City University of New York Harry A. Hamill Boston University Robert C. Gorin University of California, Berkeley Harold E. Kren University of California, Los Angeles J. Kenneth Clancy California State University, Fullerton Andrea M. Evans Cleveland State University Linda H. Rogalski University of Detroit Mercy Charles R. Boulton East Carolina University Allan K. Shores Kimberly J. Shores Eastern Michigan University Richard H. Moran George Mason University Carol Shapiro Georgia Southern
University Lewis M. Stewart Lehigh University Aimee P. Jalazo Loyola College in Maryland Stephen R. Hertel Michigan State University Philip E. Lippincott Alexander C. McKeen New York University Mario P. Borini Northwestern University Edward C. Messinger University of Notre Dame Robert M. Tobben The Ohio State University Philip E. Mark John L. Marshall Charles Plum University of Pennsylvania Michael F. Barry University of San Francisco David R. Dull Santa Clara University John L. Fetter University of Southern
California Frank J. DiNoto St. John’s University Vivien M. Hegarty The University of Texas at Austin Mark C. Hensel, Jr. Allen R. Pierce Washington & Lee University Reid T. Campbell Wayne State University Debra L. Bernstein Gustaf A. Stinstrom Youngstown State University Betty Jo Licata
Amsted Industries Foundation Marilyn Franson Axa Foundation Anton T. Vanek, Jr. The Black & Decker Corporation Brad P. McMullen JP Morgan Chase Foundation Iris Altilio John Brkljacic Morgan Stanley Paul Baeske Pfizer Foundation E. Thomas Thurber
Matching Gifts
Thank You!
FOR YOUR GENEROUS SUPPORT
The Mission of the International Honor Society Beta Gamma Sigma is to encourage and honor academic achievement in the study of business, to foster personal and professional excellence, to advance the values of the Society, and to serve its lifelong members. Your generous gifts help Beta Gamma Sigma fulfill its mission by funding the Society’s programs and services, including: • BGS Scholarships • Alumni Chapter Program • Student Leadership Forum • BGS International Exchange • BGS CareerCentral • Collegiate Chapter Training • Ethical Business Leadership • And many, many more!
Help your Society fulfill its mission:
www.betagammasigma.org/ donate.htm 18 bgs international exchange SUMMER 2008 www.betagammasigma.org
BGS Medallion for Entrepreneurship
The Entrepreneurship Medallion is awarded to outstanding individuals who combine innovative business achievement with service to humanity. The 2008 Medallion for Entrepreneurship recipients are:
Michael J. Hagan Chairman and CEO NutriSystem, Inc.
Janice Bryant Howroyd Founder, Chairman and CEO ACT•1 Group
Joseph V. Tortorice, Jr. President and CEO Jason’s Deli, Deli Management, Inc.
Business Achievement Award
The Business Achievement Award is presented to honor individuals for significant achievement in business through the traditional corporate route. The 2008 Business Achievement Award recipients are:
Sir Adrian Cadbury Former Chairman Cadbury Schweppes
William R. Sautter President and CEO Elliott-Lewis Corporation
BGS CareerCentral is the only job search site exclusive to Beta Gamma Sigma members. It’s the place the world’s top businesses go when they are looking to hire the “Best in Business.”
Ready for your next career step? Looking to hire the “Best in Business?”
BGS CareerCentral can help! careercentral.betagammasigma.org
Beta Gamma Sigma Outstanding Chapters 2008 Gold Award
Stephen F. Austin State University Stephen F. Austin State University was named the 2008 Gold Chapter, the highest recognition a collegiate chapter can earn through Beta Gamma Sigma. This is the second consecutive year that Stephen F. Austin has been named the BGS Gold Chapter. A $1,500 scholarship will be awarded to one of Stephen F. Austin State University’s outstanding student members.
2008 Silver Award
Saint Joseph’s University For the third year in a row, Saint Joseph’s University has been recognized with Beta Gamma Sigma’s Silver Chapter Award. As the Society’s Silver Chapter, a $1,250 scholarship will be awarded to one of the chapter’s outstanding student members.
2008 Bronze Award
La Salle University Just a year after receiving Honorable Mention, La Salle University has been named the Bronze Collegiate Chapter. This marks the sixth time since 2001 that La Salle University has been named as an Outstanding Chapter. A $1,000 scholarship will be awarded to one of the chapter’s outstanding student members.
Honorable Mentions
Brock University Coastal Carolina University Sam Houston State University
Beta Gamma Sigma, Inc. 125 Weldon Parkway Maryland Heights, MO 63043-3101 www.betagammasigma.org bgshonors@betagammasigma.org (314) 432-5650
Beta Gamma Sigma congratulates its 2008 Outstanding Chapter recipients.
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