CFO MAGAZINE: Déjà Judy

April 2004

Analysts have a bone to pick with Judith Boynton, once CFO of Polaroid Corp. and now finance chief of Royal Dutch/Shell Group.

If recent allegations against Royal Dutch/Shell Group CFO Judith Boynton are true—that she knew about massive shortfalls in the company's oil and gas reserves two years before they were made public—then, say some, it wouldn't be the first time she helped keep potentially material information under wraps.

During Boynton's previous job, as Polaroid Corp.'s CFO, some dubious accounting maneuvers helped keep some bad financial news off the year-end books, thus ensuring a clean audit opinion, according to a special examiner's report compiled in the wake of Polaroid's 2001 bankruptcy. The report alleged that in fourth-quarter 2000, the company improperly reversed $5.8 million in restructuring charges related to layoffs, charges it ended up taking again the next year. Without the reversal, it could have been in default of covenants on more than $500 million in bonds. The examiner also alleged that the company failed to reclassify $500 million in long-term debt as short term, a change that "might have been appropriate" as early as December 2000. The artificially low short-term debt was a "significant" reason the company's December 31, 2000, financial statement was clear of a "going concern" warning from its auditors, the examiner determined. Polaroid has defended its accounting for both items.

Boynton resigned from Polaroid in January 2001, one day before the company's fiscal 2000 conference call.

The British press has been intrigued by Boynton, a woman CFO in a male-dominated industry. She rose quickly at Shell, and in 2003 was the first woman ever named to its Committee of Managing Directors.

But back home, analysts have a bone to pick with her. "The moment [Boynton] joined Shell," says Ulysses Yannas, an analyst with Buckman, Buckman & Reid Inc. who followed Polaroid for more than 30 years, "I said, these are two stocks to avoid, Shell and Royal Dutch. I'm not surprised by what she's facing now. She was not a success story at Polaroid."

Boynton is a defendant in several shareholder suits alleging she helped manipulate Polaroid's numbers during her tenure to make the company look far healthier than it was. —Kris Frieswick