Outreach Strategy

August 18, 2004

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EBR Consortium EBR Consortium ManagementManagement

Legal entity formationLegal entity formation

Budget: $2-$4 million/year?Budget: $2-$4 million/year?

Decision-makingDecision-making

Authorization matrixAuthorization matrix

CEO roles & responsibilities CEO roles & responsibilities expectations…expectations…

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Roles & ResponsibilitiesRoles & Responsibilities

EBR Consortium Management EBR Consortium Management TeamTeam Consortium Development Consortium Development

(4-6 staff initially): (4-6 staff initially): CEO & PresidentCEO & President Business Strategy Development & Business Strategy Development &

Analysis DirectorAnalysis Director Framework Development Support/ Framework Development Support/

Project Managers*Project Managers* IT Project ManagerIT Project Manager 2 Admin Staff2 Admin Staff

EBRC President & CEO

Bus. Strategy DirectorProject Mgr(s).* IT Project Mgr. Admin Staff Admin Staff

Qorvis Qorvis to serve to serve as as temportemporary ary office office locationlocation

*Number of project managers will depend upon the number of industries served

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Current ResourcesCurrent ResourcesNameName SCEBR Support SCEBR Support

RoleRoleEBRC Support RoleEBRC Support Role

Al AndersonAl Anderson AICPA LeadAICPA Lead Board MemberBoard Member

Mike StarrMike Starr ChairChair Board MemberBoard Member

Bob LauxBob Laux MemberMember Board MemberBoard Member

John John O’ConnorO’Connor

PWC LiaisonPWC Liaison Board MemberBoard Member

Susan HindsSusan Hinds MemberMember President & CEOPresident & CEO

Bob EcclesBob Eccles Kitchen Cabinet MemberKitchen Cabinet Member

Mike KrzusMike Krzus Executive DirectorExecutive Director

Paul HerringPaul Herring PCTF ChairPCTF Chair

Amy Amy PawlickiPawlicki

AICPA Dedicated StaffAICPA Dedicated Staff

Erin Erin MacklerMackler

Private Co. Task ForcePrivate Co. Task Force

Qorvis StaffQorvis Staff Marketing & Marketing & CommunicationsCommunications

Additional Staff NeedsAdditional Staff Needs Marketing SupportMarketing Support

Framework Development Framework Development SupportSupport

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PreliminaryPreliminary Funding Model Funding Model Estimated Annual Budget = $2-$4 MillionEstimated Annual Budget = $2-$4 Million

FundiFunding ng

SourcSource:e:

SourceSource Upfront Cost Upfront Cost to Join Per to Join Per MemberMember

Total Start-Total Start-Up FundingUp Funding

Charter Charter MembeMembe

rsrs

CorporatioCorporationsns

Current: Current: 10-1610-16

Proposed: Proposed: 2-32-3

Current: Current: $100,000$100,000

Proposed: Proposed: $500,000$500,000

InstitutionInstitutional al InvestorsInvestors

Current: Current: 5-75-7

Proposed: Proposed: 2-32-3

Current: Current: $100,000$100,000

Proposed: Proposed: $500,000$500,000

EnablersEnablers Current: Current: 5-75-7

Proposed: Proposed: 2-32-3

Current: Current: $100,000$100,000

Proposed: Proposed: $500,000$500,000

TOTALTOTAL Current: Current: 20-3020-30

Proposed: Proposed: 6-86-8

Current: $2-$3 Current: $2-$3 mil mil

Proposed: $3-Proposed: $3-$4 mil$4 mil

Current: $2-Current: $2-$3 mil $3 mil

Proposed: $3-Proposed: $3-$4 mil$4 mil

Other Other SourcesSources

GrantsGrants

Training/ Training/ Investor Investor Ed.Ed.

NISTNIST

Problem Problem SolutionSolution

SEC/PCAOB/ SEC/PCAOB/ FASB fundsFASB funds

Other?Other?

FoundatiFoundationon6-8 big 6-8 big names to names to achieve achieve critical critical mass in mass in the USthe US

Grandfather

1st 4 Charter

Members at $100k

each

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OngoingOngoing Funding Model Funding Model Estimated Annual Budget = $2-$4 MillionEstimated Annual Budget = $2-$4 Million

Funding Funding Source:Source:

SourceSource Annual Annual Membership Membership

DuesDues

Total Total Annual Annual FundingFunding

Charter Charter MembersMembers

Current: Current: 20-30 20-30

Proposed: Proposed: 15-2015-20

50% 50% Producers Producers 25% 25% Consumers Consumers 25% Enablers25% Enablers

US, UK, US, UK, Europe, Europe, India, Asia-India, Asia-PacificPacific

To be determined To be determined by Charter by Charter MembersMembers

General General MembershipMembership

To be determined To be determined by Charter by Charter MembersMembers

LuminariesLuminaries $0$0 $0$0

ObserversObservers $0$0 $0$0

TOTALTOTAL $2-$4 $2-$4 MillionMillion

After After foundation foundation is in place:is in place:Complete Complete US US representatrepresentation & ion & accelerate accelerate internationinternational outreachal outreach

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Launch StrategyLaunch Strategy National LaunchNational Launch

NYC or DC?NYC or DC? Regional LaunchRegional Launch

East Coast – MIT CFO Forum, East Coast – MIT CFO Forum, BostonBoston

Midwest – TBDMidwest – TBD Southern Region – TBDSouthern Region – TBD West Coast – TBDWest Coast – TBD

InternationalInternational Locations TBD…Locations TBD…

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Media CoverageMedia Coverage Bloomberg News (Mark Jaffe)Bloomberg News (Mark Jaffe) Business Week (David Henry)Business Week (David Henry) CFO MagazineCFO Magazine Forbes (Brent Nelson)Forbes (Brent Nelson) FortuneFortune The New York Times (Jonathan The New York Times (Jonathan

Glater)Glater) Wall Street Journal (Paul Barrett)Wall Street Journal (Paul Barrett) Journal of AccountancyJournal of Accountancy MIT Sloan ReviewMIT Sloan Review Harvard Business ReviewHarvard Business Review Others???Others???

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Regulatory Regulatory Support/EndorsementSupport/Endorsement

Seek preliminary meeting Seek preliminary meeting and support/endorsement and support/endorsement of key regulatory of key regulatory agencies and standard agencies and standard setters who will be setters who will be invited to the Consortium invited to the Consortium as as ObserversObservers:: SECSEC PCAOBPCAOB FASB FASB IASBIASB

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Domestic & International Domestic & International Outreach StrategyOutreach Strategy

Phased approach:Phased approach:

Phase 1: US, UK & India Phase 1: US, UK & India

Phase 2: France/Germany, Phase 2: France/Germany, Australia, Australia,

Phase 3: Others…Phase 3: Others…

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Domestic & International Domestic & International Outreach StrategyOutreach Strategy

Luminary TargetsLuminary Targets

Strategic Partner Strategic Partner AlliancesAlliances

Industry TargetsIndustry Targets Industry Association Industry Association

TargetsTargets

Company TargetsCompany TargetsConsortium Consortium MembersMembers

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LuminariesLuminaries American University (Bob American University (Bob

Kogod)Kogod) Harvard (Krishna Palepu)Harvard (Krishna Palepu) Kellogg (Don Jacobs)Kellogg (Don Jacobs) MITMIT Rutgers (Miklos Vasarhelyi)Rutgers (Miklos Vasarhelyi) University of ChicagoUniversity of Chicago Barbara FranklinBarbara Franklin Don TapscottDon Tapscott Peter WallisonPeter Wallison James GlassmanJames Glassman Others?Others?

International TBD…

Confirmed

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Strategic Partners Outreach Strategic Partners Outreach StrategyStrategy

Mike Krzus developed & distributed plan to enlist Mike Krzus developed & distributed plan to enlist targeted groups as strategic partners of the targeted groups as strategic partners of the Consortium in order to build critical mass for the Consortium in order to build critical mass for the Consortium as quickly as possible.Consortium as quickly as possible.

The strategy is to schedule meetings or briefings The strategy is to schedule meetings or briefings with these groups as soon as possible using the with these groups as soon as possible using the best relationships we can identify with each group. best relationships we can identify with each group.

Fifteen potential strategic partners have been Fifteen potential strategic partners have been identified and will be asked to make introductions identified and will be asked to make introductions to potential members…to potential members…

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Domestic Strategic Partner Domestic Strategic Partner OutreachOutreach ProducersProducers

Business RoundtableBusiness Roundtable National Association of Corporate DirectorsNational Association of Corporate Directors National Investor Relations InstituteNational Investor Relations Institute US Chamber of CommerceUS Chamber of Commerce Edison Electric InstituteEdison Electric Institute Financial Executives International]Financial Executives International] Detroit RenaissanceDetroit Renaissance

ConsumersConsumers Council of Institutional InvestorsCouncil of Institutional Investors Investment Company InstituteInvestment Company Institute

EnablersEnablers AICPAAICPA CFA Institute (formerly AIMR)CFA Institute (formerly AIMR) NASDAQNASDAQ New York Stock ExchangeNew York Stock Exchange Securities Industry AssociationSecurities Industry Association

LEGEND:Confirmed

In Process

Not Yet Approached

Domestically Based

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UK/France/GermanyUK/France/Germany International Chamber of CommerceInternational Chamber of Commerce Confederation of British IndustryConfederation of British Industry London Stock ExchangeLondon Stock Exchange Investment Management Association, UKInvestment Management Association, UK Medef (CBI counterpart in France)Medef (CBI counterpart in France) TransAtlanticBusinessDialog (TABD)TransAtlanticBusinessDialog (TABD)

IndiaIndia Confederation of Indian IndustryConfederation of Indian Industry

AustraliaAustralia TBDTBD

Internationally Based:Preliminar

y List

LEGEND:Confirmed

In Process

Not Yet Approached

International Strategic International Strategic Partner OutreachPartner Outreach

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Charter MemberCharter MemberIndustry Selection CriteriaIndustry Selection Criteria

Target industry selection criteria:Target industry selection criteria: InnovativeInnovative Broad-reachingBroad-reaching Unmet reporting needs (e.g. intangible Unmet reporting needs (e.g. intangible

asset based)asset based) InfluentialInfluential Contacted SEC liaison to cross-check their Contacted SEC liaison to cross-check their

priority industry sectorspriority industry sectors Contacted XBRL representative to cross-Contacted XBRL representative to cross-

check with industry sectors they are check with industry sectors they are working onworking on

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Target company identification underway for the Target company identification underway for the following sectors:following sectors:

Industry SectorIndustry Sector Agreement on Industry Agreement on Industry Sectors;Sectors;

Top 2-4 Priority Sectors?Top 2-4 Priority Sectors?Information TechnologyInformation Technology

Banks Banks

InsuranceInsurance

Railroad Railroad

Electric Utilities Electric Utilities

PharmaceuticalsPharmaceuticals

Oil & gasOil & gas

Telecommunications Telecommunications

Investment managementInvestment management

AutomotiveAutomotive

Diversified Manufacturing Diversified Manufacturing (e.g. to capture GE)(e.g. to capture GE)

Charter Member IndustriesCharter Member Industries

Straw-Man Proposal:

Producers (4): 4 Priority Sectors

Consumers (1): Investment Management (Institutional Investors)

Enablers (2): Accounting & Investment Management (Analysts)

Total: 7-8 Industry Sectors Targeted

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Charter MemberCharter MemberCompany Selection CriteriaCompany Selection Criteria

Company selection criteria within Company selection criteria within target industry sectors:target industry sectors: Top ten by market capitalizationTop ten by market capitalization Fortune 500 top fourFortune 500 top four Hoovers top ten searchedHoovers top ten searched Social mapping resultsSocial mapping results Any companies that have recently Any companies that have recently

undergone investor or regulatory undergone investor or regulatory scrutiny (looking for a pro-active scrutiny (looking for a pro-active solution)solution)

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Charter Member Company Charter Member Company TargetsTargets

Preliminary List of Company Targets Identified by Sector:Preliminary List of Company Targets Identified by Sector:

IndustryIndustry Companies Companies ((Charter MembersCharter Members, , ApproachedApproached, , TargetsTargets))

ITIT MicrosoftMicrosoft, Oracle, Comp. Assoc. Intl., Electronic Arts, Dell, , Oracle, Comp. Assoc. Intl., Electronic Arts, Dell, Cisco, HP, Cisco, HP, IBMIBM, Great Plains, Intuit, Great Plains, Intuit

Banks Banks Citigroup, Bank of America, J.P. Morgan Chase, Citigroup, Bank of America, J.P. Morgan Chase, UBSUBS

InsuranceInsurance MetLife, Prudential, AFLAC, UnumProvident, Travelers, AIG, MetLife, Prudential, AFLAC, UnumProvident, Travelers, AIG, Marsh, ProgressiveMarsh, Progressive

Railroad Railroad BNSF, Union Pacific, Norfolk Southern, CSX, Canadian National BNSF, Union Pacific, Norfolk Southern, CSX, Canadian National

Electric Electric Utilities Utilities

Exelon, FirstEnergy, Exelon, FirstEnergy, Edison InternationalEdison International, Dominion Resources, Dominion Resources

PharmaPharma P&G, Abbott Labs, J&J, Pfizer, 3M, Merck, GSK, Bristol-Myers P&G, Abbott Labs, J&J, Pfizer, 3M, Merck, GSK, Bristol-Myers Squibb, Squibb, AstraZenecaAstraZeneca

Oil & gasOil & gas Exxon Mobil, ChevronTexaco, Conoco Phillips, Valero Energy, Exxon Mobil, ChevronTexaco, Conoco Phillips, Valero Energy, BPBP, , Sunoco, Sunoco, ShellShell

TelecomTelecom Verizon, Verizon, SBC CommunicationsSBC Communications, AT&T, Sprint, AT&T, Sprint

Investment Investment Mgmt.Mgmt.

Goldman Sachs, Merrill Lynch, Goldman Sachs, Merrill Lynch, Morgan StanleyMorgan Stanley, Fidelity, , Fidelity, Vanguard, Moody’s, S&P, Vanguard, Moody’s, S&P, Barclays Global InvestorsBarclays Global Investors

AutomotiveAutomotive GM, Ford, Daimler-Chrysler, GM, Ford, Daimler-Chrysler, Toyota, TowerToyota, Tower, Dana Corp., , Dana Corp., GKNGKN..

OtherOther GE, Berkshire Hathaway, GE, Berkshire Hathaway, Cadbury Schweppes, Hanson, Cadbury Schweppes, Hanson, DixonsDixons

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Consumers & Enablers Consumers & Enablers TargetsTargets

Brainstorm SessionBrainstorm Session

Consumer Charter Members: Consumer Charter Members: Target 4-Target 4-5 /Actual 05 /Actual 0

Enabler Charter Members: Enabler Charter Members: Target 4-Target 4-5 /Actual 35 /Actual 3

AICPAAICPA

Grant Thorton Grant Thorton

PWCPWCConfirmed

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Auto Industry AnalysisAuto Industry Analysis

Demo: Key Players in Supplemental Demo: Key Players in Supplemental Information Information

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Research & Research & Communications IssuesCommunications Issues

Tapscott- HR & change mgmt (harmonizing Tapscott- HR & change mgmt (harmonizing views) and US based Coloplast studyviews) and US based Coloplast study

Target Industry analysis- similar to auto industryTarget Industry analysis- similar to auto industry Book- conceptual EBR book- manuscript due Book- conceptual EBR book- manuscript due

2/052/05 COSO integration concept (training grant)COSO integration concept (training grant) White Papers in key universitiesWhite Papers in key universities Press release strategyPress release strategy Study 1990’s- 2003 stock market trends and Study 1990’s- 2003 stock market trends and

material misstatement/fraud announcements material misstatement/fraud announcements (macro)(macro)

Unveiling of new logoUnveiling of new logo

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Strategic Alignment: Strategic Alignment: Critical IssuesCritical Issues

Alignment of Structure & ContentAlignment of Structure & Content Co-Dependent Funding ModelCo-Dependent Funding Model IMA outreachIMA outreach Charter members- complimentary or Charter members- complimentary or

competitive modelcompetitive model Consortium decision ultimately (only Consortium decision ultimately (only

can discuss strategic partnership)?can discuss strategic partnership)? Intellectual property & data Intellectual property & data

ownershipownership

EBR Consortium Domain-Framework-Integration-Standards-Guidelines

-Measurements-XBRL enabled

IMA/CMA-Internal Reporting

-ABC/ABM- Process/Cost -Value Drivers

-KPI’s(Measures Intangible

Value/Kaizen)

CPA-Disclosure

-External Reporting-Risk Management

-Assurance(Close the

“expectationgap”)

APQC & Industry Groups

- Data Warehouse-Best Practices

-Process Metrics-Functional KPI’s

-Industry Networks-Research/knowledge base

-XBRL enabled

Business ReportingConsumers

-Transparency increased -Benchmarking

-Independence in analysis-XBRL enabled

Voluntary DisclosuresAccessible to the Public

Internal Management & ReportingInternal Management & Reporting External Reporting & AssuranceExternal Reporting & Assurance

Critical Success Factors Assurance Provided

-Benchmarking-Segment Analysis-Continuous Improvement