Technical committee profile: CPC.

FEI's Committee on Private Companies (CPC) has changed its structure and leadership and is increasing its activities as it strives to represent the needs of approximately 48 percent of FEI members who work for private and closely held companies. Over the past two years--and under the supervision of FEI staff liaison Bob Shepler, based in FEI's Washington, D.C., office--the committee has stepped-up its advocacy activities and downsized its meeting schedule to include two larger and highly-focused meetings per year, (from four in previous years).

The committee's volunteer chairman is FEI Chicago Chapter member James Atkinson, who is CFO of Ariel Capital Management, a mutual fund and separate client investment advisor in Chicago that concentrates its investment selection on undervalued small and medium-sized companies. Atkinson began his involvement with CPC about three years ago, and became chairman on July 1, with his tenure to run until June 30, 2005. He was acting chair since last November.

Atkinson says at the first meeting he attended at the Drake Hotel in Chicago, he was made to feel "extraordinarily comfortable." It struck him, as a "special gathering," and one consisting of "some really smart people around the table, from different industries from all over the country." He found it significant that the group decided to come together and cover some key topics for their private-company niche; he immediately became involved.

CPC was established in June 1997 to address the professional needs of those members in private and closely held companies, and to provide a voice for their interests, both within FEI and externally--before appropriate governmental and regulatory bodies.

CPC tracks developments affecting private and closely held companies, promotes information exchange among interested members and oversees the development of programs, products and services that address its constituents. CPC, through its work and communications, is fully integrated with FEI headquarters, FEI's other committees and FEI chapters and members.

Additionally, CPC is authorized to formulate FEI position statements on matters affecting private and closely held companies and communicate those positions to appropriate sources: organizations, government agencies, the academic community and other external interested parties.

The new focus on two larger meetings per year makes CPC unique from the other FEI committees, that each have four annual gatherings. Also, unlike other FEI committees, CPC does not have a "formal" membership regime, explains Shepler, and it is always open for additional members. "Currently, we have about 250 people on our email list, but all those people do not attend every meeting," he adds.

Also, CPC committee members don't walk away from meetings with an assignment, adds Atkinson, although, he comments "we are looking for people to help plan meetings." The committee is working with FEI staff to shape an agenda that will draw a critical mass of people at the next meeting--scheduled October 7-8 in Chicago. "We'll run an effective meeting on the key topics selected, where there will be a lot of information passed around," says Shepler. He says meeting agendas always allow ample opportunities for people to get to know each other and to share their views on the selected topics through networking and discussions.

Basically, Shepler says, "you can think of CPC meetings as smaller FEI Summits, that are held on a bi-annual basis." And, unlike the Summit or other FEI conference events, CPC's meetings are open to FEI members only. Members can bring guests, but only those who are potential members.

It's all about serving the needs of members in this category, Atkinson says, "We are moving towards really providing not only content and information for our members, but also to get more involved in some appropriate issues.

"While we don't follow as much of a technical agenda as other FEI committees, he says, nonetheless, CPC can be an important lobbying group. The advocacy work that this committee has done and is capable of doing is very significant."

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As example, Atkinson notes, the committee has been successful in working with the Financial Accounting Standards Board (FASB) to delay implementation for FASB Standard No. 150 Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity for private companies. First, CPC provided a comment letter, and it then influenced the FASB to delay, for private companies, implementation of the standard. "This severely impacted private companies," says Atkinson. FASB is currently studying the issue and will report its decision. "We are going to continue to monitor it very closely, but the rule, as written, basically would have wiped out the equity of most private companies."

When the issue arose, CPC sprung into action. "We formed a task force and asked, 'who's interested in this issue? Who will help draft comment letters? etc.,'" says Atkinson. Going forward, he adds, "On a case-by-case basis of need, we'll form a task force or ad-hoc committee to take action on an issue."

As external issues arise, both FEI and CPC members also get involved. For instance, when FASB formed a small-business advisory committee to study the effect of new regulations on private companies, two or three of FEI members joined the FASB committee.

Atkinson applauds his predecessor, Bob Orben of Columbus Container, as someone who had done a great job of bringing people together and working with FEI staff to present great meetings. "He is a very strong and powerful individual, and very charismatic," says Atkinson.

In his tenure as chair, what are some of Atkinson's plans? "We've got quality of content, and a core group of people. Now, we need to build awareness of the committee and the activities that are available," says Atkinson. "This is a great resource for FEI members," he adds.

There are many issues in the wings: one, association health-plan legislation, would allow associations, like FEI, to provide deep discounts to their members through pooling healthcare-risk. Legislation is pending before the Senate now. "About a year-and-a-half ago, during our Washington, D.C., meeting, some members met with members of Congress to lobby them on that issue," notes Atkinson.

A second issue in CPC's radar is trying to influence specific provisions of the Patients' Bill of Rights so that it doesn't adversely affect employers who sponsor health plans. A third issue relates to the tax impact on how companies are formed--whether S corporations or LLCs. Atkinson explains, more private companies were formed as S corporations (prior to LLC, which is now available). So while more LLCs are formed now, there are a significant number of S corporations with stringent rules, such as the number of shareholders a company can have. This, too, is an area where CPC is attempting to advocate in favor of tax law modernization.

The meeting agenda October 7-8 in Chicago includes topics on liquidity for privately held companies, effectively communicating with HR departments and business automation. See FEI's Web site for the full agenda and registration information: www.fei.org/committees/CPCI.